Question

The domestic market for video games is illustrated in the table below. Currently the world price of video games is $15 per unit. Price per Game $10 15 20 25 30 35 Quantity Supplied (per week) 0 20 40 60 80 100 Quantity Demanded (per week) 90 80 70 60 50 40 If a $5 tariff is imposed in this market, the new level of domestic demand is games per week and the new level of domestic supply is games per week. (Enter your responses as a whole number. V and a width equal to the difference The level of revenue generated by this tariff can be represented graphically by a rectangle with a height equal to the difference between between The dollar amount of this tariff revenue is roughly $(Enter your response as a whole number.)

Answer 1

70; 40
(At Pw + tariff, P = 15 + 5 = 20. So, Qd = 70 and Qs = 40.)

world price after tariff and world price before tariff; quantity supplied and quantity demanded at new world price with tariff
(Tariff revenue = area of rectangle = tariff*imports after tariff)

150
(TR = Tariff*(Qs - Qd) = 5*(70 - 40) = 5*30 = 150)