Question

Question 21 (2 points) Use the Graph below to answer the following question: $100 Sus P (thousands) SW $40 510 530 Dus D 510 0 100 190 250 . 335 Q Q thousands World Semiconductor Market U.S. Domestie Semiconductor Market [2 points) 21. Consumer surplus after the implementation of the $10 tariff is: 25 7,500 4,875 16,250 11,375

Answer 1

Answer

21 $7500

The area in blue is onsumer surplus = 0.5*250*(100-40) = 7500

22. $600

Area yellow, tax revenue = (250-190)*(10) =$600

23. Loss $825

Area in red is the dead weight loss = (190-100)*0.5*10+(325-250)*0.5*10= $825

24. Jobs in manufacturing vs. services

Alan Blinder speaks of the above in the article " Pain from trade spurs and second thoughts"

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