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Suppose that the Kingdom of Acre is a small country that imports spears under the world price of $6 per unit. Since the Queen wants

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Suppose that the Kingdom of Acre is a small country that imports spears under the world price of $6 per unit. Since the Queen wants to increase the government revenues, she imposes an import tariff of $2 per unit. Use the following graph to calculate the welfare effects and fill out the table below. Show your work. Price (per unit) Domestic Supply Domestic Demand 8 10 12 16 Spears (quantity) Note: Figure is not drawn to scale Gain or Loss Dollar ($) a) Change in consumer surplus due to the tariff b) Change in producer surplus due to the tariff c) Change in government revenue d) Net Welfare Effect from the tariff

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