The US decides to impose a tariff on Avocados of $0.75 each Under Free Trade you have the following information: World and US Price: $1 per Unit Domestic Consumption 25 Billion Units 1 Billion Units Domestic Production: Under a Tariff you have the following information: New US Price: Domestic Consumption: $1.75 per Unit 21 Billion Units Domestic Production: 5 Billion Units (a) How much does the government gain in tariff revenue? (b) How much do domestic producers gain? (c) How much do consumers lose? (d) What is net national or "dead weight" loss?

Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
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Question 14
The US decides to impose a tariff on Avocados of $0.75 each
Under Free Trade you have the following information:
World and US Price: $1 per Unit
Domestic Consumption
Domestic Production:
25 Billion Units
1 Billion Units
Under a Tariff you have the following information:
New US Price:
$1.75 per Unit
21 Billion Units
5 Billion Units
(a) How much does the government gain in tariff revenue?
Domestic Consumption:
Domestic Production:
(b) How much do domestic producers gain?
(c) How much do consumers lose?
(d) What is net national or "dead weight" loss?
Transcribed Image Text:Question 14 The US decides to impose a tariff on Avocados of $0.75 each Under Free Trade you have the following information: World and US Price: $1 per Unit Domestic Consumption Domestic Production: 25 Billion Units 1 Billion Units Under a Tariff you have the following information: New US Price: $1.75 per Unit 21 Billion Units 5 Billion Units (a) How much does the government gain in tariff revenue? Domestic Consumption: Domestic Production: (b) How much do domestic producers gain? (c) How much do consumers lose? (d) What is net national or "dead weight" loss?
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