Price ($ per car) 39,500 20,000 17,000 3,000 Marginal social side benefits from domestic production ($ per car) 7 8.5 7 8.5 13 15 Sd Do Tariff Quantity (thousands of cars per year) MSSB Quantity (thousands of cars per year) Question 1. In the diagram above, area t (which includes both dark and light shaded area) is $4 million. a. What is the gain/ loss to the country from imposition of a $3,000 tariff on import of cars? b. What is the gain/loss to it from a $3,000 subsidy per car on domestic production of cars?

Price ($ per car) 39,500 20,000 17,000 3,000 Marginal social side benefits from domestic production ($ per car) 7 8.5 7 8.5 13 15 Sd Do Tariff Quantity (thousands of cars per year) MSSB Quantity (thousands of cars per year) Question 1. In the diagram above, area t (which includes both dark and light shaded area) is $4 million. a. What is the gain/ loss to the country from imposition of a $3,000 tariff on import of cars? b. What is the gain/loss to it from a $3,000 subsidy per car on domestic production of cars?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter18: Public Economy

Section: Chapter Questions

Problem 6SCQ: Anastasia, Emma, and Greta are deciding what to do on a weekend getaway. They each suggest a first,...

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