Suppose the world price of clothing is $50 per unit. Domestic demand and domestic supply are determined by the following equations: Domestic Demand: p = 200 − 2q Domestic Supply: p = 20 + 3q where p and q represent price and quantity, respectively. Domestic government levies an ad valorem tariff rate of 100% 11. Under the 100% tariff protection, domestic economy’s national welfare is worth _____ or so. A) $1,250 B) $2,850 C) $3,025 D) $4,733 12. Under free trade, domestic economy’s national welfare is worth _________or so. A) $5,250 B) $5,775 C) $6,125 D) $6,575 13. Suppose that domestic economy moves from the initial free trade regime to the 100% tariff regime. Then the deadweight loss resulting from production inefficiency can be calculated at _________ or so A) $416.75 B) $455.25 C) $525.15 D) none of the above
Suppose the world
determined by the following equations:
Domestic Demand: p = 200 − 2q
Domestic Supply: p = 20 + 3q
where p and q represent price and quantity, respectively. Domestic government levies an ad valorem tariff rate of 100%
11. Under the 100% tariff protection, domestic economy’s national welfare is worth _____ or so.
A) $1,250
B) $2,850
C) $3,025
D) $4,733
12. Under free trade, domestic economy’s national welfare is worth _________or so.
A) $5,250
B) $5,775
C) $6,125
D) $6,575
13. Suppose that domestic economy moves from the initial free trade regime to the 100% tariff
regime. Then the
_________ or so
A) $416.75
B) $455.25
C) $525.15
D) none of the above
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