Tariff on Imported Good Suppose the country Home has the following demand and supply functions for a good x (you may assume the price p will be such that neither supply nor demand are negative): Home Supply: Qf, = 40 + 3p Home Demand: Q3 = 80 2p Home production of the good is not enough to satisfy the Home demand, so Home also imports good x from Foreign. Define Home's import demand for good x, IM, as Import Demand: [M 2 QB Q)\"; Suppose the country Foreign has the following demand and supply functions for the good x (you may assume the price p will be such that neither supply nor demand are negative): Foreign Supply: 0;9 = 40 + 10p Foreign Demand: Q? = 100 10p Define Foreign's export supply of good x, EX, as Export supply: EX : Qg Q? a. The Home government decides to impose a per unit tariff on the imports of good xfrom Foreign of $1.25 per unit of imported good x. Atariff is simply a tax on the imports of the good Home producers of good x do not lave a tariff on their goods. Like a tax, this means the price the Home consumers pay for the imported good with the tariff (call it pT) is not the price the Foreign producers get for exporting it to Home (call it pF) 7the difference being the tariff. Find p1 and pF such that Home's demand for imports of good x equals Foreign's export supply of good x and determine the burden of the tariff on the Home consumers and the Foreign producers. (6) b. Since this is a competitive market, the Home producers of good x also charge p1 for good x. Find the amount of good x that Home produces and the amount that Home consumes at price pT (2) c. Comparing the outcome with the tariff to the outcome with no tariff, evaluate the welfare effects of the tariff on the Home nation: namely: (8) i. Use Consumer Surplus to find how much the Home consumers are better or worse offfrom the tariff. ii. Use Producer Surplus to find how much the Home producers are better or worse offfrom the tariff. iii. Find how much the Home nation's Social Benefit ohanged ie how much the Home nation overall is better or worse off from the tariff