Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For a particular product, Country A's supply and demand are represented by the following functions:Q s = 0 + P; Q d = 52 -

For a particular product, Country A's supply and demand are represented by the following functions:Qs= 0 + P; Qd= 52 - P. Suppose Country A is a small country (it takes the world price as given) and the free-trade world price is $10.

Numerical answers are required for the questions. (12 points; 3 points each)

(1) If the government of Country A imposes a 100% tariff on the imports, how much does Country A import?

(2)Moving from free trade to the 100% tariff, by how much does the consumer's surplus change? (Positive number means a gain; a negative number means a loss)

(3)Moving from free trade to the 100% tariff, by how much does the producer's surplus change? (Positive number means a gain; a negative number means a loss)

(4) Moving from free trade to the 100% tariff, what is the deadweight loss for Country A caused by the tariff?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental And Natural Resource Economics

Authors: Thomas H Tietenberg, Lynne Lewis

10th Edition

1315523965, 9781315523965

More Books

Students also viewed these Economics questions

Question

Pollution

Answered: 1 week ago

Question

The fear of making a fool of oneself

Answered: 1 week ago