The graph below represents the market for sugar in the U.S. The domestic supply and demand curves are drawn, the world price for sugar is indicated, and the effect of a tariff the US is imposing on sugar imports is shown. Use the graphic to calculate consumer surplus, producer surplus, economics surplus, government revenue, and deadweight loss. Do so under each of the following three situations: 1) no trade, 2) free trade, and 3) the sugar tariff.
The graph below represents the market for sugar in the U.S. The domestic supply and demand curves are drawn, the world price for sugar is indicated, and the effect of a tariff the US is imposing on sugar imports is shown. Use the graphic to calculate consumer surplus, producer surplus, economics surplus, government revenue, and deadweight loss. Do so under each of the following three situations: 1) no trade, 2) free trade, and 3) the sugar tariff.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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The graph below represents the market for sugar in the U.S. The domestic supply and demand curves are drawn, the world price for sugar is indicated, and the effect of a tariff the US is imposing on sugar imports is shown. Use the graphic to calculate consumer surplus , producer surplus , economics surplus, government revenue, and deadweight loss . Do so under each of the following three situations: 1) no trade, 2) free trade, and 3) the sugar tariff.
Transcribed Image Text:2. The graph below represents the market for sugar in the U.S. The domestic supply and demand curves
are drawn, the world price for sugar is indicated, and the effect of a tariff the US is imposing on sugar
imports is shown. Use the graphic to calculate consumer surplus, producer surplus, economics surplus,
government revenue, and deadweight loss. Do so under each of the following three situations: 1) no
trade, 2) free trade, and 3) the sugar tariff.
Price
(dollars
per pound)
$5.00
3.00
2.00
1.50
0.75
0
7 10
12 15 20
Supply
Pw+tariff
-World price (Pw
Demand
Quantity of sugar
(millions of pounds)
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