This preview shows page 1. Sign up to view the full content.
Unformatted text preview: (c) Now suppose that Bhutanese king decides to impose a quota that not more than 7 apples can be imported. i. What will be the new equilibrium price? (Realize that the quota means that 7 = Q D & Q S ; use that to solve for P ). ii. What is the consumer surplus with the quota? iii. What is the producer surplus with the quota? iv. What is the deadweight loss from having the quota? (d) Instead of a quota, suppose the Bhutanese king decides to impose a tari/ of $1 on imported apples. i. What will be the new equilibrium price with the tari/? ii. How much will be imported given the tarri/? iii. What are the consumer and producer surplus with the tari/? iv. What is the government revenue with the tari/? v. What is the deadweight loss? 1...
View Full Document
This note was uploaded on 07/22/2008 for the course ECON 100B taught by Professor Rauch during the Spring '07 term at UCSD.
- Spring '07