III. Open Economy with Tariff

Use the following information to answer question a) ~ g). Suppose that the government imposes atariff of $4on each imported CD player, and theworld price is $10per CD player.

1. What is the quantity supplied by domestic producers after the introduction of the tariff?
2. What is the quantity demanded by domestic consumers after the introduction of the tariff?
3. How many CD players will the country import or export after the introduction of the tariff?
4. Draw a graph and shade the areas of the consumer surplus (CS^tariff), the producer surplus (PS^tariff), the total tariff revenue (TR^tariff), and the deadweight loss (DWL) after the introduction of tariffs.
5. Calculate the value of consumer surplus (CS^tariff) and the value of producer surplus (PS^tariff) for the CD player market after introducing the tariff.
6. Calculate the value of total tariff revenue (TR^tariff).
7. Calculate the value of the deadweight loss (DWL).