Worksheet 3

Worksheet 3 - d If the tariff is imposed specify the gain...

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Homework is due Monday March 5, 2007 Name_______________________________ Homework 3 INTS 1500 (36 points) Question 1. In the following graph for a small nation showing the situation of free trade in a product, at a price of $10. and the situation of an import tariff, at a price of $11, answer the questions below. P S B 12 A C E 11 Pw + tariff F G H K 10 Pworld N R L M W D 0 Q1 Q2 Q3 Q4 Q output Each letter on the graph represents the area between the respective lines on the graph. Please give the appropriate letters that answer each of the following questions. (3 points each) a. If the tariff is imposed, specify the total loss of consumer surplus by consumers. _______________ b. If the tariff is imposed, specify the net loss in welfare or the total deadweight loss. _______________ c. If the tariff is imposed, specify the area of government tariff revenue
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Unformatted text preview: ________________________ d. If the tariff is imposed, specify the gain in surplus attributed to domestic producers. _______________ Question 2. a. What is the US GSP? (4 points0 b. Are the US GSP consistent with the WTO’s policies regarding fair and equal treatment in trade? (6 points ) Question 3. If a nation in question 1 decides to impose an import quota rather than an import tariff such the same amount of goods were imported with the quota as with the tariff, what happens to the tariff revenue that would normally go to the government?. (8 points) 4. In the article in King on US tariff and the poor, explain why the US has its highest tariffs on relatively cheap generic type goods and how this tariff mainly impacts the poor .(6 points)...
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Worksheet 3 - d If the tariff is imposed specify the gain...

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