The US decides to impose a tariff on Avocados of $0.75 each Under Free Trade you have the following information: $1 per Unit World and US Price: Domestic Consumption 25 Billion Units 1 Billion Units Domestic Production: Under a Tariff you have the following information: New US Price: $1.75 per Unit Domestic Consumption: Domestic Production: 21 Billion Units 5 Billion Units (a) How much does the government gain in tariff revenue? (b) How much do domestic producers gain? (c) How much do consumers lose? (d) What is net national or "dead weight" loss?

The US decides to impose a tariff on Avocados of $0.75 each Under Free Trade you have the following information: $1 per Unit World and US Price: Domestic Consumption 25 Billion Units 1 Billion Units Domestic Production: Under a Tariff you have the following information: New US Price: $1.75 per Unit Domestic Consumption: Domestic Production: 21 Billion Units 5 Billion Units (a) How much does the government gain in tariff revenue? (b) How much do domestic producers gain? (c) How much do consumers lose? (d) What is net national or "dead weight" loss?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The US decides to impose a tariff on Avocados of $0.75 each
Under Free Trade you have the following information:
$1 per Unit
World and US Price:
Domestic Consumption
25 Billion Units
1 Billion Units
Domestic Production:
Under a Tariff you have the following information:
New US Price:
$1.75 per Unit
Domestic Consumption:
Domestic Production:
21 Billion Units
5 Billion Units
(a) How much does the government gain in tariff revenue?
(b) How much do domestic producers gain?
(c) How much do consumers lose?
(d) What is net national or "dead weight" loss?

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