Questions 1-7 are based on the Figure 1. (7*2=14 points) Figure 1: The U.S. Market for Computers Price S (domestic supply curve) $2,400 Domestic price with tariff $2,000 World price D ( domestic demand curve) 100 120 190 200 Quantity (thousands of units) 1. Under free-trade the US imported computers, but after imposing a tariff the US imported computers. 2. The imposition of a tariff on computers caused producer surplus to (increase/decrease) by $ 3. The imposition of a tariff on computers caused consumer surplus to _ by 4. How much revenue will the US government collect as a result of the tariff on computers? 5. The imposition of a tariff on computers caused total economic welfare in the US to by 6. What is the production effect of the tariff on computers? 7. What is the consumption effect of the tariff on computers? 8. What are Voluntary Export Restraint (VER) agreements? Why do some governments force foreign exporters into them instead of just using quotas or tariffs to restrict imports by the same amounts? Is it because VERs bring the importing country a bigger national gain than quotas or tariffs? (3 points) 9. A small country imports sugar. With free trade at the world price of $0.15 per pound the country's national market is: (4*2=8 points) Domestic Production: 100 million pounds per year Domestic Consumption 450 million pounds per year Imports 350 million pounds per year The country's government now decides to impose a quota that limits sugar imports to 200 million pounds per year. With import quota in effect, the domestic price rises to $0.18 per pound, and domestic production increases to 150 million pounds per year. The government auctions the right to import the 200 million pounds. a. Calculate the domestic producers gain or loss from the quota b. Calculate the domestic consumers gain or loss from the quota c. Calculate how much the government can receive in payment if it auctions the quota rights to import. d. Calculate the net national gain or loss from the quota