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International trade Consider a large country that imports good R. Some ofthe total quantity of R domestically consumed is supplied by domestic producers and the

International trade

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Consider a large country that imports good R. Some ofthe total quantity of R domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government imposed a tariff on each unit of R that is imported, so that the quantity of R imported is somewhat reduced. Draw a demand and supply diagram that shows the effect of the tariff. On your diagram, shade-in the area that represents the increase in producer surplus (please do not shade any other areas in). Discuss why it would be naive (simple minded) to regard this large- country case as a legitimatejustification for protectionism. (Maximum word limit: 250 words)

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