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Question 3. (15 points) Suppose a small country already has a import tariff on a good. Then it increases a current tariff. The increase in
Question 3. (15 points) Suppose a small country already has a import tariff on a good. Then it increases a current tariff. The increase in tariff is small enough so that the quantity imported remains positive. A. Graphically find the effects of the tariff increase on: domestic price, imports, tax revenue, consumer surplus, producer surplus, deadweight loss. B. Does an increase in tariff increase, decrease the tax revenue or is the change in tax revenue ambiguous
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