Suppose that demand and supply are exactly as described in problem 3 but that there is no

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Suppose that demand and supply are exactly as described in problem 3 but that there is no marginal social benefit to production. However, for political reasons the government counts a dollar’s worth of gain to producers as being worth $3 of either consumer gain or government revenue. Calculate the effects on the government’s objective of a tariff of 5 per unit.


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International Economics Theory and Policy

ISBN: 978-0273754206

9th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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