Question

I need a explanation! Thank you.

$ 150 P. - 100 $50 100 200 300 400 500 600 700 800 900 1000 (sugariton) 33) Refer to Figure 9.5.1 34) Refer to Figure 9.5.1 above. If free trade in sugar above. If free trade in sugar 35) Refer to Figure 9.5.1 is replaced by a $50 tariff on is replaced by a $50 tariff in above. In order to gain the sugar, the effect on domestic sugar, government revenue equivalent imports as a $50 producer surplus will be to: from the tariff will be: tariff, the government would A) lower it by $50. A) $50. have to impose a quota of: B) lower it by $12,500. B) $5000 A) 100 tons of sugar. C) leave it unchanged. C) $15,000. B) 200 tons of sugar. D) raise it by $50. D) $17,500. C) 300 tons of sugar. E) raise it by $12,500. E) $25,000 D) 350 tons of sugar. Answer: E Answer: B E) 500 tons of sugar. Section 95 Section 95 Answer: A Section 95

Answer 1

33) Domestic producer surplus before tariff = 0.5*(100 - 0)*200 = $10000. Domestic producer surplus after tariff = 0.5*(150 - 0)*(300) = $22500. Hence PS increases by $12500.

0 0 90 P.-S 100 $50 100 200 300 400 500 600 700 800 900 1000 Q(sugar on)

34) Government revenue = imports * tariff = (400 - 300)*50 = $5000

$ 400 S350 S 300 S 250 S 200 S 175 S 150 P.-S 100 $50 100 200 300 400 500 600 700 800 900 1000 (sugar on

35) $50 tariff is reducing imports from 300 to 100 tons. The price is increased from 100 to 150. Shift the supply curve to the right so that it meets the demand at a price of $150 which is the price after tariff. This will display the required import quota

- 100 $50 100 200 300 400 500 600 700 800 900 1000 Q(sugarton)