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Suppose again that we are in the same small, now-open, economy with: =5+s =802d And a world price still equal to pw = $14. Suppose

Suppose again that we are in the same small, now-open, economy with: =5+s =802d And a world price still equal to pw = $14. Suppose as well that the government is lobbied buy local businesses for relief from international competitive pressures. The government is moved by this and responds, instituting an import tariff of $9. 1. Does this make producers better off? By how much does their Producer Surplus rise? 2. What is the change in Total Surplus resulting from this reduction in trade?

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