1. When A country, a large country, imposes a tariff on foreign imports, what are the impacts on A country's welfare? Draw a well labeled diagram and explain. (welfare is a sum of gains/loss of three segments consumer, producer s and government.)
2. If A is a small country, what are the welfare impacts? How is it different from the case in (a)? Draw a well labeled diagram and explain.
3. If infant industry protection is justified, is it better for A country to use a tariff or a quota, and why?