#3 PRICE (Dollars per tonne) cengage.com/static/nb/ui/evo/index.html?elSBN=9780357302934&snapshotld=D2741525&id3D1376796971& E CENGAGE MINDTAP Q Search thisC News Analysis: Nailing Down Metal Tariffs THIR A JA 15 ndu BILLS Consider a hypothetical example of trade in aluminum between the United States and China. For simplicity, assume that China is the only source of U.S. aluminum imports. The following graph shows the U.S. market for aluminum. Note that in the absence of any trade, the market price for aluminum in the United States is $500 per tonne, and the equilibrium quantity is 50 million tonnes per month. Use the green area (triangle symbol) to show U.S. consumer surplus under free trade with China, and use the purple area (diamond symbol) to show U.S. producer surplus under free trade with China. 0000 Domestic Demand Domestic Supply 006 Consumer Surplus 008 Producer Surplus 009 Free Trade Price 1. 06 20 08 09 QUANTITY OF ALUMINUM (Millions of tonnes per month) MacBook Air DOO F4 114 F8 F10 & 24 4. 5 7. 6 H B. W alt command option pubwu * 00 LU %#3 lapshotld%3D2741525&id%3D1376796971& CENGAGE MINDTAP Q Sea News Analysis: Nailing Down Metal Tariffs Use the previous graph to complete the first row of the following table by indicating the quantity of aluminum supplied by U.S. producers, demanded by U.S. consumers, and imported from China under free trade. Quantity Demanded by U.S. Quantity Supplied by U.S. Producers Consumers Quantity Imported from China (Millions of tonnes of aluminum per (Millions of tonnes of aluminum per (Millions of tonnes of aluminum per month) month) month) Free Trade Trade with Tariff Suppose American aluminum manufacturers convince the U.S. government that Chinese firms are selling aluminum in the U.S. market at well below the cost of producing the aluminum, a practice known as dumping. In response to the accusations, the U.S. government puts a tariff of $200 per tonne on aluminum from China. The tariff increases the price of aluminum from $200 to $ per tonne. Complete the second row of the previous table by indicating the quantity of aluminum supplied by U.S. producers, demanded by U.S. consumers, and imported from China in the presence of a $200-per-tonne tariff. On the following graph, use the black line (cross symbol) to indicate the domestic price of aluminum in the presence of a $200-per-tonne tariff. Then use the green area (triangle symbol) to shade the area that represents consumer surplus under the tariff, and use the purple area (diamond symbol) to shade the area that represents producer surplus under the tariff. Finally, use the grey rectangle (star symbols) to show the revenue that the U.S. government collects as a result of the tariff, and use the tan triangles (dash symbols) to show the deadweight loss (DWL) from the imposition of the tariff. Note: There are two DWL triangles. Plot the right-most DWL triangle first, then plot the left-most DWL triangle after that. Plotting the DWL triangles out of order may cause your answer to be graded incorrectly. DamesticDemand Domestic Supply MacBook Air 02 F3 114 F8 F12 F10 F2 F5 F4 & $4 4. %23 9. 6 Y R. B. W alt