Question

3. By looking to the following Figure indicate whether import Tariff Imposed by a Small Country will increase or decrease the following indicators by giving the reasons • Price effect • Consumption effect • Production (or protective) effect • Imports effect • Government revenue effect • Consumer surplus effect • Producer surplus effect : Р. 2 b c Pw Tariff 0 8 0,

Answer 1

(3).

Answer:

Given that,

$\rightarrow$ By looking to the following Figure indicate whether import Tariff Imposed by a Small Country will increase or decrease the following indicators by giving the reasons:

Reasons:

Price effect:

Price increases from $P_{w}$ to $P_{w+tariff}$ .

Consumption effect:

Quantity decreases from
Q2
to
4

Production (or protective) effect:

Production increases from$Q_1$ to $Q_3.$

Imports effect:

Import decreases from $Q_1Q_2$ to $Q_3Q_4$ .

Government revenue effect :

Government revenue=area c.

Consumer surplus effect:

Consumer surplus decreases by Area a+b+c+d.

Producer surplus effect:

Producer surplus increases by area a.

P. Port Tariff b d Pw da a 3 Q4 Dla

Note:

** As per Chegg guidelines we should solve only the first question. So I have done it.
For the other question please post differently mentioning your requirement