Suppose the domestic demand-and-supply curves are given by the following equations:

Demand: P = 60 - 2Q

Supply: P = 4 + 2Q

Question:

a. in a closed economy, what is market equilibrium?

Now let's consider international trade and the world price for a good is $24.

b.How much is consumed?

c. How much is produced at home?

d. How much is imported to this country?

e. What are the values of consumer and producer surplus?

Now, there is a tariff, $4 per unit.

f. What is the volume of import?

g. How much do consumption anddomestic production change?

h. What is the change in consumer and producer surplus?

i. How much revenue does the government earn from the tariff?

j. What is the deadweight loss of the tariff?