Sugar is freely traded in the world market. Assume that a country, Wolf Den, is a price taker in the world market for sugar. Some of the sugar consumed in Wolf Den is produced domestically while the rest is imported. The world price of sugar is $2 per pound. The graph below shows Wolf Den's sugar market, and PW represents the world price.

(a) At the world price of $2 per pound, how much sugar is Wolf Den importing?

(b) Suppose that Wolf Den imposes a per-unit tariff on sugar imports and the new domestic price including the tariff is $4. (i) Identify the new level of domestic production. (ii) Calculate the domestic consumer surplus for Wolf Den.

(iii) Calculate the domestic producer surplus for Wolf Den.

(iv) Calculate the total tariff revenue collected by the government.

(c) Label dwl, and PS, CS before and after tariff. Explain the economic consequences of the tariff using welfare analysis.