A. The free trade price of Shoes is $25 while the autarky price in a SMALL country is $50. This country produces 10 million shoes and consumes 20 million shoes in free trade. A tariff of $10 increased the production of shoes to 12 million units and consumption decreased to 18 million units. The change in producer surplus in this country with this policy is
A. The free trade price of Shoes is $25 while the autarky price in a SMALL country is $50. This country produces 10 million shoes and consumes 20 million shoes in free trade. A tariff of $10 increased the production of shoes to 12 million units and consumption decreased to 18 million units. The change in producer surplus in this country with this policy is
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 9PA
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Question
![A. The free trade price of Shoes is $25 while
the autarky price in a SMALL country is $50.
This country produces 10 million shoes and
consumes 20 million shoes in free trade. A
tariff of $10 increased the production of shoes
to 12 million units and consumption
decreased to 18 million units. The change in
producer surplus in this country with this
policy is
A. +$160 million
B. $-190 million
C. +$190 million
D. $110 million
В.
The free trade price of Shoes is $25 while the
autarky price in a SMALL country is $50. This
country produces 10 million shoes and
consumes 20 million shoes in free trade. A
tariff of $10 increased the production of shoes
to 12 million units and consumption
decreased to 18 million units. The net welfare
effect of this policy is
A. -$20 million
B. -$60 million
C. -$30 million
D. -$10 million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F97240434-22e8-47af-8d13-a6415087090b%2F24f0bc00-dfd0-45b1-9f14-12f680b474e3%2Fehayzg6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A. The free trade price of Shoes is $25 while
the autarky price in a SMALL country is $50.
This country produces 10 million shoes and
consumes 20 million shoes in free trade. A
tariff of $10 increased the production of shoes
to 12 million units and consumption
decreased to 18 million units. The change in
producer surplus in this country with this
policy is
A. +$160 million
B. $-190 million
C. +$190 million
D. $110 million
В.
The free trade price of Shoes is $25 while the
autarky price in a SMALL country is $50. This
country produces 10 million shoes and
consumes 20 million shoes in free trade. A
tariff of $10 increased the production of shoes
to 12 million units and consumption
decreased to 18 million units. The net welfare
effect of this policy is
A. -$20 million
B. -$60 million
C. -$30 million
D. -$10 million
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