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Solve the following question. 3. Now, suppose the importing country government wants to protect domestic producers. To do so, it imposes specific import tariff equal

Solve the following question.

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3. Now, suppose the importing country government wants to protect domestic producers. To do so, it imposes specific import tariff equal to $2 per physical unit of the imported good. (a) Find the new equilibrium prices, trade quantity, and consumption as well as production in each country. (2.5 points) (b) Calculate CS, PS, GS, and TS for each country. How big are the gains/losses for each country relative to free trade? How does the world's total welfare change? (5 points)

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