Set06-Tar - Econ 441 Summer Term 2003 Alan Deardorff...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 441 Alan Deardorff Summer Term 2003 Problem Set 6 Page 1 of 3 Problem Set 6 Tariffs 1. The graph below shows domestic supply and demand for a good in a small country. Suppose that it faces a world price of the good of $4 per pound. Show the effects on this market of a 25% ad valorem tariff on the good by drawing the equilibria with and without the tariff, then using the grid lines in the figure to calculate the changes in quantities supplied, demanded, and imported, and the welfare effects of the tariff on suppliers, demanders, government, and the country as a whole. 2. Use the partial equilibrium, small-country model of a tariff to work out the effects of an increase in a tariff that was already positive. For each case below, find the effects on domestic price, domestic quantities supplied and demanded, quantity of imports, and the welfare of suppliers, demanders, government, and the country as a whole. Also note, by comparing with your notes from class, whether any of these results differ from the effects of a positive tariff starting from a zero tariff. a.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 3

Set06-Tar - Econ 441 Summer Term 2003 Alan Deardorff...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online