Question

Welfare Effect of Import Tariff (Small Country Case) Figure: Home Market Home market S Price 22 PW + t 16 PW D 10 14 22 26 Quantity The supplied graph shows information about a home importer. Suppose the Home market shown in the figure has imposed a $6 tariff which increased domestic price from $16 (under free trade) to $22 (with tariff). 1. Under free trade, the Home country's import was , with tariff, the home country's import is . 2. After the imposition of the tariff, the producer surplus in the Home country will (increase/decrease) by $ . 3. After the imposition of the tariff, the consumer surplus in the Home country will (increase/decrease) by $ . 4. The government revenue due to the tariff is $ . 5. The deadweight loss because of the tariff is $ .

          Welfare Effect of Import Tariff (Small Country Case)
Figure: Home Market
Home market
S
Price
22
PW + t
16
PW
D
10 14
22 26
Quantity
The supplied graph shows information about a home importer. Suppose the Home market shown in the figure has imposed a $6 tariff which increased domestic price from $16 (under free trade) to $22 (with tariff).
1. Under free trade, the Home country's import was
, with tariff, the home country's import is
.
2. After the imposition of the tariff, the producer surplus in the Home country will
(increase/decrease) by $
.
3. After the imposition of the tariff, the consumer surplus in the Home country will
(increase/decrease) by $
.
4. The government revenue due to the tariff is $
.
5. The deadweight loss because of the tariff is $
.

Welfare Effect of Import Tariff (Small Country Case)
Figure: Home Market
Home market
S
Price
22
PW + t
16
PW
D
10 14
22 26
Quantity
The supplied graph shows information about a home importer. Suppose the Home market shown in the figure has imposed a 6 tariff which increased domestic price from16 (under free trade) to 22 (with tariff).
1. Under free trade, the Home country's import was
, with tariff, the home country's import is
.
2. After the imposition of the tariff, the producer surplus in the Home country will
(increase/decrease) by
.
3. After the imposition of the tariff, the consumer surplus in the Home country will
(increase/decrease) by .
4. The government revenue due to the tariff is
.
5. The deadweight loss because of the tariff is .

Added by Elijah H.

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