A small country is facing the following domestic supply curve of a product: S - 200 + 20P, as well as the following domestic demand curve of a product: D = 400 - 20P. It can import it at a world price of 10 per unit. In addition, each unit of production yields a marginal social benefit of 10. The effect on welfare of an import tariff of 9 per unit is $ 480 420 O 320 O 480 O -180 500 O 420 O 180 500 O 320

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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A small country is facing the following domestic supply curve of a product: S = 200 + 20P, as well as
the following domestic demand curve of a product: D = 400 20P. It can import it at a world price of
10 per unit. In addition, each unit of production yields a marginal social benefit of 10. The effect on
welfare of an import tariff of 9 per unit is $
-480
-420
320
O 480
-180
O -500
O 420
O 180
O S00
-320
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Transcribed Image Text:A small country is facing the following domestic supply curve of a product: S = 200 + 20P, as well as the following domestic demand curve of a product: D = 400 20P. It can import it at a world price of 10 per unit. In addition, each unit of production yields a marginal social benefit of 10. The effect on welfare of an import tariff of 9 per unit is $ -480 -420 320 O 480 -180 O -500 O 420 O 180 O S00 -320 • Previous Next
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