Problem 6. Consider a country A which imports two goods, X and Y, from another country. Considerthat the demand, in country A, for each of the products is given by:D : Px = 300 – 4XD4 : Py = 300-4Y%3DThe supply of each good is given by:s : Px = 20 + 5Xs : Py = 20 + 10Y2Suppose the government in country A wants to impose a 10% tariff on just one of the goods in orderto maximize its revenue. Which of the two goods should the country impose the tariff on?

The demand of country A: For X: Px = 300 – 4X For Y: Py = 300-4Y Supply of each good: For X: Px =…

Problem 6. Consider a country A which imports two goods, X and Y, from another country. Consider that the demand, in country A, for each of the products is given by: DA : Px = 300 – 4X D : Py = 300 – 4Y The supply of each good is given by: sA : Px = 20 + 5X S: Py = 20 + 10Y Suppose the government in country A wants to impose a 10% tariff on just one of the goods in order to maximize its revenue. Which of the two goods should the country impose the tariff on?

Problem 6. Consider a country A which imports two goods, X and Y, from another country. Consider that the demand, in country A, for each of the products is given by: DA : Px = 300 – 4X D : Py = 300 – 4Y The supply of each good is given by: sA : Px = 20 + 5X S: Py = 20 + 10Y Suppose the government in country A wants to impose a 10% tariff on just one of the goods in order to maximize its revenue. Which of the two goods should the country impose the tariff on?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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