Q1. (21 points) President Trump signed an executive order to build the US-Mexico border wall. The wall was estimated to cost 515 billion, and Mr. Trump vowed to make Mexico pay for it. Mexican President refused to pay for the wall. Trump's spokesman Sean Spicer said that the US could easily make Mexico pay for the wall by imposing a 20% tariff on US imports from Mexico. L 2) 3) 4) (5 points) Suppose that the US is a small importer of product A from Mexico. Who in this case is paying for the wall when a taniff is imposed on US imports of A from Mexico? Analyze with a graph. Clearly label each area you refer to in your analysis. (7 points) Suppose that the US is a large importer of product B from Mexico. Who in this case 1s paying for the wall when a tariff is imposed on US imports of B from Mexico? Analyze with graphs. Clearly label each area you refer to in your analysis. (6 points) Suppose that the US successfully raised $15 billion from tariffs on imports of A and B from Mexico. Use the graphs in part 1) and part 2) to show the total deadweight costs of the wall. Clearly label each area you refer to in your analysis. (3 points) The total deadweight costs in part 3) is based on an implicit assumption that may not hold in the case of US and Mexico trade relationship. What is the implicit assumption? | Discuss potential deadweight costs of financing the wall with US tariffs on imports from Mexico if we release this implicit assumption. Impact of Tariff on a Large"Importer of Product B 50 Deadweight Loss 40 30 Demand for B Price Supply of B (Pre-Tariff) Supply of B (Post-Tariff) 20 10 0 20 40 60 80 100 Quantity