Macroeconomics
4th Edition
ISBN: 9781464110375
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
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Question
Chapter 5, Problem 10P
To determine
a. To determine gain or loss in consumer surplus due to change in tariff
Gain in consumer surplus with no tariff is equal to the area (A+B+C+D).
To determine
b. To determine gain or loss in
Loss in producer surplus with no tariff is equal to the area (A)
To determine
c. To determine gain or loss in to government due to change in tariff
With no tariff, loss to the government is equal to the revenue given by area (C).
To determine
d. To determine gain or loss in to whole economy due to change in tariff
The whole economy gains equal to area (B+D), if there is no tariff.
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