Question 9Figure 7-2Price(dollarsper pound)$3.002.501.750.5012 18 26 38 45O $11.25 million.O $18 million.U.S. SupplySuppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 7-2 shows the impact of this tariff.O $32.5 million.Pw+tariffWorld price (PRefer to Figure 7-2. The increase in domestic producer surplus as a result of the tariff is equaltoO $45 million.U.S. DemandQuantity of coffee(millions of pounds)

Tariffs are taxes(T) imposed by a government on imported goods. They protect domestic industries by…

$3.00 2.50 1.75 0.50 0 12 18 26 38 45 World price (P U.S. Demand Quantity of coffee (millions of pounds) Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 7- 2 shows the impact of this tariff. Refer to Figure 7-2. The increase in domestic producer surplus as a result of the tariff is equal to

$3.00 2.50 1.75 0.50 0 12 18 26 38 45 World price (P U.S. Demand Quantity of coffee (millions of pounds) Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 7- 2 shows the impact of this tariff. Refer to Figure 7-2. The increase in domestic producer surplus as a result of the tariff is equal to

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price per Saddle Domeslic Supply P2 Tariff World Price P1 G Domestic Demand Q1 Q2 Q3 Q4 Quantity of Saddles With the tariff in place, the total tax revenue equals O (1/2)x(Q2-Q1)x(P2-P1) + (1/2)x(Q4-Q3)x(P2-P1) O P2 x Q3 (P2 - P1) x (Q3 - Q2) O (P2 - P1) x (Q4 - Q1)
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Lesson 12 Question 7