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Having trouble with this study guide can someone help me ? Suppose the nation of Isoland is an importer of textiles and is looking for
Having trouble with this study guide can someone help me ?
Suppose the nation of Isoland is an importer of textiles and is looking for a way to raise government revenue. The following graph shows the effect of a tariff on textile imports. ? Supply A Price of Textiles PW + T C D E F Demand PW G Q5.1 QS.2 QD. 1 Quantity of TextilesHaving rejected a tariff on textiles (a tax on imports), the president of Isoland is now considering the samesized tax on textile consumption (including both imported and domestically produced textiles]. Under a textile consumption tax, the quantityr of textiles consumed in Isoland is V , and the quantityr produced in [soland is V . The following table shows the effect of an import tariff on the nation of Isoland. Complete the remaining columns of the following table by indicating the effect of the samesized tax on textile consumption. Under Tariff Under Consumption Tax Before Tariff or Tax After Change After Change Consumer A+B+C+D+E+F A+B (C+D+E+F} v Surplus Producer Surplus G C + G +0 V ' Government None E +E V ' Revenue TotalSurplus A+B+C+D+E+F+G A+B+C+E+G 7(D+F) V i > V deadweight Compared to the tariff, the consumption tax raises V revenue for the government and has loss associated with itStep by Step Solution
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