ces ces Price (dollars per ton 800 $1,000 600 400 200 2 3 D Steel (millions of tons per year) The figure shows the market for steel in the United States. If the world price for a ton of steel is $200 per ton, how much steel does the United States import? Suppose the United States imposes a tariff of $400 per ton of steel. With this tariff, how much steel does the United States import? If it is possible to calculate the amount of the deadweight loss from the $400 per ton tariff, what is the amount? If it is not possible, explain why it is not possible to calculate it. Next suppose the United States imposes a tariff of only $200 per ton of steel. With this tariff, how much steel does the United States import? How much revenue does the government collect from this tariff! Finally, suppose that instead of a tariff the United States imposes a quota of 2 million tons of steel per year. Bustrate how the market changes with this quota. With the quota, what is the price of steel in the United States?
ces ces Price (dollars per ton 800 $1,000 600 400 200 2 3 D Steel (millions of tons per year) The figure shows the market for steel in the United States. If the world price for a ton of steel is $200 per ton, how much steel does the United States import? Suppose the United States imposes a tariff of $400 per ton of steel. With this tariff, how much steel does the United States import? If it is possible to calculate the amount of the deadweight loss from the $400 per ton tariff, what is the amount? If it is not possible, explain why it is not possible to calculate it. Next suppose the United States imposes a tariff of only $200 per ton of steel. With this tariff, how much steel does the United States import? How much revenue does the government collect from this tariff! Finally, suppose that instead of a tariff the United States imposes a quota of 2 million tons of steel per year. Bustrate how the market changes with this quota. With the quota, what is the price of steel in the United States?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:ces
ces
Price (dollars per ton
800
$1,000
600
400
200
2
3
D
Steel (millions of tons per year)
The figure shows the market for steel in the United States. If the world price for a ton of steel is $200 per ton, how much steel does the United States
import? Suppose the United States imposes a tariff of $400 per ton of steel. With this tariff, how much steel does the United States import? If it is
possible to calculate the amount of the deadweight loss from the $400 per ton tariff, what is the amount? If it is not possible, explain why it is not
possible to calculate it. Next suppose the United States imposes a tariff of only $200 per ton of steel. With this tariff, how much steel does the United
States import? How much revenue does the government collect from this tariff! Finally, suppose that instead of a tariff the United States imposes a
quota of 2 million tons of steel per year. Bustrate how the market changes with this quota. With the quota, what is the price of steel in the United
States?
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