Question

Small HW on Tariffs g Diane Monaco Market for Sugar Based Ethanol (SBE) Supply* Price Of SBE "D" "E" P "IMPORTS" "B" Port "C" ! - - - 1 1 1 1 Demand 0 1 1 1 1 ! 1 I 1 . Q. Od god Quantity of SBE 1. Calculate the before and after consumer surplus (CS), before and after producer surplus (PS), before and after tariff revenue and the before and after consumption and production deadweight losses (both b and d as depicted in class) resulting from the implementation of a tariff in the market depicted above with the numbers below where D(intercept)= 8.00, S(intercept)-2.10, Pworld" 3.40 Pdomestie=3.90 Pworld+tarior3.55 domestico = 5 Qs=15 Qdomestic=20 Qd2=28 Qddomestic=34 2. Calculate the before and after consumer surplus (CS), before and after producer surplus (PS), before and after tariff revenue, and the before and after consumption and production deadweight losses (both b and d as depicted in class) resulting from the implementation of a tariff in the market depicted above with the numbers below where D(intercept)-19.20, S(intercept)-6.80, Pworld=10.20 Pdomestic=11.50 Pworld-turite-10.90 Osdomestic 8 Qs=14 Qdomestic=22 Qd2-27 Qddomestic=35

Answer 1

Pworld $3.40 Pleweshe = $3.90 Fisheriff $.15 5 Presid, tariff = $3.55 At 3 of domestic da domestic 34 At domestic 20 At Portariff 15 7.2.Qis 28 D(intercept) = $ 8 before s Cintercept) = $ 2.10 20 without trade At På $3,50 20 25 c. = 3 (8-3.90) = 20 +41 P.S. %. (3.90 - 2010 - 20 2 $ 18 DWL=0 30

with trade A AE $3.40 A domestica s Od domestic 34 impost = 34-5 29 unit C.5 = 1 (8-3.40) x 34 $78.2 10 P.S - / (3.40 - 2.10) x 5 = $ 3.25 Govt. Ravenue a $0 151 At Prot tariff $ 3.55 15 2 28 C.S~ (8=23.55) * 28': $62.3 P.sz (3.55 - 2.10)* 15 & 10.875 ; import a-928-15 i Gort. revenue 2 (28-15) (3.55 -3.40) $1.95, imas OWL (3.55 - 3:40)(15- 11 (3.5 -40 as Due to oreproduction torola 0.75+ 0.45 Due to undaconsu. mption $ 1.2

Camlin Page Date Dlintercept) = $19.20 s(intercept) & 6.80 2. w/o trade At Pa = $11.80 134.75 Casya ut (19.20 - 11.50),35 P.S= Y(11.50 - 6.80 x 35 $82.25 DWL = $0 With trade y At $ 10.20 di domestic : da domestic = Bs import 7135-8= 27 5. csiz(19.20-10.20)* 35 $15.5 Pisa (10.20-6.00) $13.6 Govt. have nere = $0 At Phot tariff $ 10.90 As = 14 16 30 od - 27 i impost = 27-142 13 $112.05 ♡ (19.20-10.90) * 27. (10.90- 6.80) x 14 P.SE $28.7 . Gort. Revenue = (16.90 - 10.20)*(27-14) $9.1

DWL = (10.90-10.20) (14-87} { (10.90-10.2.0) (25 – 27) Due overproduction Due to under consumption 5 12-1 + 2.8 .8