Part.Il. Essay. (20 Marks) Direction: Read carefully the following questions below. 1.The costs and benefits of a tariff or other trade policy may be measured using the concepts of consurner surplus and producer surplus. Apply these concepts and show that the domestic produc of a good gain because a tariff raises the price they receive; the domestic consumers lose, for the same reason. (10 Marks) 2. External economies give an important role to history and accident in determining the pattern of international trade. When external economies are important, a country starting with a large advanta, may retain that advantage even if another country could potentially produce the same goods more cheaply. In the above context, critically analyze the three main reasons why a cluster of firms may b more efficient than an individual firm in isolation. (10 Marks)