A. The free trade price of Shoes is $25 while the autarky price in a SMALL country is $50. This country produces 10 million shoes and consumes 20 million shoes in free trade. A tariff of $10 increased the production of shoes to 12 million units and consumption decreased to 18 million units. The change in producer surplus in this country with this policy is

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Chapter9: Application: International Trade
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A. The free trade price of Shoes is $25 while
the autarky price in a SMALL country is $50.
This country produces 10 million shoes and
consumes 20 million shoes in free trade. A
tariff of $10 increased the production of shoes
to 12 million units and consumption
decreased to 18 million units. The change in
producer surplus in this country with this
policy is
A. +$160 million
B. $-190 million
C. +$190 million
D. $110 million
В.
The free trade price of Shoes is $25 while the
autarky price in a SMALL country is $50. This
country produces 10 million shoes and
consumes 20 million shoes in free trade. A
tariff of $10 increased the production of shoes
to 12 million units and consumption
decreased to 18 million units. The net welfare
effect of this policy is
A. -$20 million
B. -$60 million
C. -$30 million
D. -$10 million
Transcribed Image Text:A. The free trade price of Shoes is $25 while the autarky price in a SMALL country is $50. This country produces 10 million shoes and consumes 20 million shoes in free trade. A tariff of $10 increased the production of shoes to 12 million units and consumption decreased to 18 million units. The change in producer surplus in this country with this policy is A. +$160 million B. $-190 million C. +$190 million D. $110 million В. The free trade price of Shoes is $25 while the autarky price in a SMALL country is $50. This country produces 10 million shoes and consumes 20 million shoes in free trade. A tariff of $10 increased the production of shoes to 12 million units and consumption decreased to 18 million units. The net welfare effect of this policy is A. -$20 million B. -$60 million C. -$30 million D. -$10 million
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