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Micro 2.9-World Price and Tariff Practice

Last updated 6 months ago

8 questions

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Question 1

1.

At a world price of $2, how much sugar is Loriland importing? (No work needed)

Question 2

2.

Given a $2 tariff, putting the new price at $4 (Since importers would not sell below $4), what is the new domestic production quantity supplied. (No work needed)

Question 3

3.

What is the new domestic consumer surplus after the tariff? (No work needed)

Question 4

4.

What is the new tax revenue after the tariff? (No work needed)

Question 5

5.

Given the world price of $2, what per-unit tariff maximizes the sum of Loriland’s domestic consumer surplus and producer surplus? (No work needed)

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Question 6

6.

Now assume that the world price is $8. How much is Loriland importing? (No work needed.)

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Question 7

7.

Now assume that the world price is $8. What is the domestic quantity demand (No work needed.)

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Question 8

8.

Now assume that the world price is $8. How much is Loriland exporting? (No work needed.)