Country Demand curve (P = S$) Supply curve (P = S$) Singapore P = 76 - 2Q P = 52 + 2Q Thailand P = 68 – 2Q P = 44 + 2Q (Assume that only two countries above involve in Product A in an international market) a) Compute the world equilibrium price and trade quantity for Product A. b) If Singapore government impose tariff of S$4 per unit of Product A, draw a diagram to illustrate the costs and benefits of tariff for Singapore. c) Based on the diagram in part (b) above, compute the following: (i) Producer gain (ii) Consumer loss (iii) Government revenue gain

Country Demand curve (P = S$) Supply curve (P = S$) Singapore P = 76 - 2Q P = 52 + 2Q Thailand P = 68 – 2Q P = 44 + 2Q (Assume that only two countries above involve in Product A in an international market) a) Compute the world equilibrium price and trade quantity for Product A. b) If Singapore government impose tariff of S$4 per unit of Product A, draw a diagram to illustrate the costs and benefits of tariff for Singapore. c) Based on the diagram in part (b) above, compute the following: (i) Producer gain (ii) Consumer loss (iii) Government revenue gain

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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