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The table below describes how many tonnes of steel would be produced, consumed, and imported by the U.S. with and without a $100 tariff. Situation

The table below describes how many tonnes of steel would be produced, consumed, and imported by the U.S. with and without a $100 tariff.

Situation without Tariff Situation with Tariff
World Price $500 per tonne $500
Tariff 0 $100 per tonne
U.S. Price $500 per tonne $600 per tonne
U.S. Consumption (million tonnes) 100 90
U.S. Production (million tonnes) 60 70
Imports (million tonnes) 40 20

Use the above table to calculate and answer the following. Assume that supply and demand are straight lines. Chapter 8 of the textbook will be very helpful in answering the questions. Keep in mind that "consumers" include firms that import steel to be used for production (e.g., car manufacturers):

a. U.S. consumers' (importers) loss from imposing the tariff.

b. U.S. producers' gain from imposing the tariff.

c. The government tariff revenue gain.

d. The net welfare effect on U.S. well-being.

e. Based on the numbers in the Table, is the U.S. a large or small country when it comes to steel?

f. If the U.S. were a large consumer of steel, what would happen to the world price after the tariff is imposed?

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