Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
Chapter 34, Problem 39CTQ

From the Work It Out “Effects of Trade Barriers,” you can see that a tariff raises the price of imports. What is interesting is that the price rises by less than the amount of the tariff. Who pays the rest of the tariff amount? Can you show this graphically?

Students have asked these similar questions
What are tariffs? How do tariffs affect consumers and producers well- being?
2.1 Suppose that the world price of oil is \$60 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United States are as follows: Price (\$ Per Barrel) 55 60 65 70 75 U.S. Quantity Demanded 26 24 22 20 18 U.S. Quantity Supplied 14 16 18 20 22 a. On graph paper, draw the supply and demand curves for the United States. b. With free trade in oil, what price will Americans pay for their oil? What quantity will Americans buy? How much of this will be supplied by American producers? How
The United States has historically imposed import tariffs on goods that include tobacco, canned tuna, steel, and aluminum. Suppose the market for tobacco is illustrated by the accompanying graph. a. As shown, the world price is \$2 per pound. Suppose the U.S. imposes a tariff of \$1 per pound. Adjust the price line labeled "World price with tariff" (at the top of the graph) to reflect this tariff.   b. Use the letters and values in the graph to fill in the following table.   Without tariff With import tariff Price     Quantity demanded     Quantity supplied     Domestic consumer surplus     Domestic producer surplus     Government revenue     Total economic surplus       c. If the government decides to replace the tariff with a quota that will have the same effect on the market as the tariff, the quota should restrict imports to____________________( 1million pounds, 2 million…
Knowledge Booster
Recommended textbooks for you
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
MACROECONOMICS FOR TODAY
Economics
ISBN:9781337613057
Author:Tucker
Publisher:CENGAGE L
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
• Copyright, Community Guidelines, DSA & other Legal Resources: Learneo Legal Center
• bartleby, a Learneo, Inc. business