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8 Dec 2017

41) A subsidy is a A) tax imposed by the government on imported goods. B) payment made by the government to a producer. C) payment made by a consumer to a producer. D) payment made by foreign governments to domestic farmers. E) tax imposed by the government on a producer.

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Hubert Koch
Hubert KochLv2
9 Dec 2017
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Related questions

2) A production quota A) is a lower limit to the quantity of a good that can be produced in a specified period. B) is an upper limit to the quantity of a good that can be produced in a specified period. C) is a payment made by a consumer to a producer. D) is a payment made by a producer to a consumer. E) is a payment made by the government to a producer.

Given the demand and supply equations are QD = 950 - P and QS=2P-160, suppose the free trade (world) price is $200.
a. Solve for the amount imported, consumer surplus, and producer surplus.
b. Suppose a per unit tariff of $30 is imposed by the government. Solve for the consumer surplus, producer surplus, government revenue and total surplus with the tariff.
c. Solve for the change in consumer surplus, the change in producer surplus, the change in government revenue and change in total surplus.

QD 950 - P and QS = 2P - 160

Welfare Effects of a Tariff:
Given the demand and supply equations above, suppose the free trade (world) price is $200.

a. Solve for the amount imported, consumer surplus, and producer surplus.

b. Suppose a per unit tariff of $30 is imposed by the government. Solve for the consumer surplus, producer surplus, government revenue and total surplus with the tariff.

c. Solve for the change in consumer surplus, the change in producer surplus, the change in government revenue and change in total surplus (i.e. the deadweight loss) from the free trade case (without the tariff). [To do this, make the calculations using your answers in 3a, and calculate total surplus under free trade].

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