Consider a small country where the demand and supply curves of a
particular commodity are respectively,
Qd = 10 – P and
Qs = P/3, where
Qd is the quantity demanded,
Qs the quantity supplied and
P the price. Assume that the international price of this
commodity is 6.
a) Compute Qd,
Qs, imports (M), the consumer
surplus (CS) and the producer surplus
(PS).
b) Next, assume that the country imposes a tariff t =
1. Compute Qd,
Qs, M, the...