. Problem 6. Consider a country A which imports two goods, X and Y, from another country. Considerthat the demand, in country A, for each of the products is given by:D: Px = 300 –– 4XD : Py300 – 4YThe supply of each good is given by:S : Px = 20 + 5XSA : Py = 20 + 10Y2Suppose the government in country A wants to impose a 10% tariff on just one of the goods in orderto maximize its revenue. Which of the two goods should the country impose the tariff on?

We see that demand for both X and Y are similar. They have the same price elasticity. The supply…

Problem 6. Consider a country A which imports two goods, X and Y, from another country. Consider that the demand, in country A, for each of the products is given by: D: Px = 300 – 4X D :. : Py = 300 –- 4Y The supply of each good is given by: S : Px = 20+ 5X %3D S# : Py = 20 + 10Y 2 Suppose the government in country A wants to impose a 10% tariff on just one of the goods in order to maximize its revenue. Which of the two goods should the country impose the tariff on?

Problem 6. Consider a country A which imports two goods, X and Y, from another country. Consider that the demand, in country A, for each of the products is given by: D: Px = 300 – 4X D :. : Py = 300 –- 4Y The supply of each good is given by: S : Px = 20+ 5X %3D S# : Py = 20 + 10Y 2 Suppose the government in country A wants to impose a 10% tariff on just one of the goods in order to maximize its revenue. Which of the two goods should the country impose the tariff on?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 6SCQ: A tariff is a tax on imported goods. Suppose the U.S. government cuts the tariff on imported flat...

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