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Trade

Microeconomics – Week #8 Assignment

Trade Restrictions – Tariffs Directions: Answer the questions below based on the graph.

 

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1. How many units will the domestic firms produce without trade? 2. How many units will the domestic firms produce without a tariff if the foreign producer can

sell the product at a $4 price? 3. How many units will the foreign firms produce / sell if a government tariff of $2.00 is imposed

on foreign goods? 4. What will be the total government revenues if a tariff of $2.00 is imposed on foreign goods? 5. What will be the total deadweight losses if a tariff of $2.00 is imposed on foreign goods?

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