Homework 4 Answers.pdf - ECON 1014 HOMEWORK#4 ANSWER...

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Page 1 ECON 1014 HOMEWORK #4 ANSWER Chapter 9 Use the following to answer question 1: Figure: Trade a. If this figure represents the market for oil and the country imposes no tariffs on international trade, domestic consumption will be: (1 pt.) 1,300 units (1 pt.) b. Calculate the tariff revenue generated, the value of lost gains from trade and value of wasted resources caused by imposing a $25 tariff in this market. (3 pts.) tariff revenue: (1150-750)x(175-150)=$10,000 (1 pt.) lost gains from trade: (1300-1150)x(175-150)x.5=$1,875 (1 pt.) wasted resources: (750-500)x(175-150)x.5=$3,125 (1 pt.) /30
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