Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
Question
Chapter 16, Problem 14CQ
To determine

The impact of quota determined domestic price above the world price.

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Students have asked these similar questions
Under what conditions could an import quota and a tariff have exactly the same effect on price and bring the same gains and losses (given a tariff level that restricts imports just as much as the quota would)?
Under what conditions could an import quota and a tariff have have exactly the same effect on price and bring the same gain and losses ( given a tariff level that restricts imports just as much as the quota would)?
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount:   World price of wine (free trade):             $20 per bottle Domestic production (free trade):           500,000 bottles Domestic production (after tariff):           600,000 bottles Domestic consumption (free trade):        750,000 bottles Domestic consumption (after tariff):       650,000 bottles   Draw a demand and supply curve for the country’s wine market to show the effects of the tariff. Find the change in consumer surplus, producer surplus, and government revenue resulting from the tariff.
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