Show graphically the changes in Producer Surplus, Consumer Surplus, Deadweight Loss and Government Tax Revenue when...

Show graphically the changes in Producer Surplus, Consumer Surplus, Deadweight Loss and Government Tax Revenue when the government institutes a Tariff on imports? If the economy is a large economy show graphically an optimal tariff.

Expert Solution

A tariff refers to a specific type of tax that the government imposes on products or services entering or leaving the nation. In theory, when governing body places imposes a tariff program, the additional costs saddled upon the affected items reduces imports, and causes an impact on the balance of trade

In the enclosed graph, prior to the imposition of tariff all the area under the demand curve and above the dotted line indicating the world-price was consumer surplus and all below this line however above the blue supply curve was producer surplus. When government institutes tariff on imports it create few societal loss that was previously consumer surplus (the shaded areas in red), causing a shift of few value from consumers to producers (the shaded area in yellow between world price and tariff), and shift few value from consumers to the government (the shaded area in blue).

Rahul Sunny answered 2 years ago

Define Consumer surplus, Producer surplus and Deadweight loss.

With aids of graph, define consumer & producer surplus. Then show how the deadweight loss affects...

With aids of graph, define consumer & producer surplus. Then show how the deadweight loss affects efficiency. 1- Consumer surplus is 2- Producer surplus is 3- Govemment revenue 4- Deadweight loss is 5- Total surplus is

Find and graph the Post Tax Consumer Surplus,Producer Surplus,Tax Revenue, Dead Weight Loss, and the economic...

Find and graph the Post Tax Consumer Surplus,Producer Surplus,Tax Revenue, Dead Weight Loss, and the economic incidence of the Tax Demand is P=18-2Q Supply is P=Q Tax is $6 per unit

2. Consumer Surplus and Producer Surplus Explain in words and graphically how consumer surplus, producer surplus...

2. Consumer Surplus and Producer Surplus Explain in words and graphically how consumer surplus, producer surplus and total surplus change when the minimum wage is removed. Assume the minimum wage is above the free market price. In your explanation please interpret the components of the changes in consumer surplus, producer surplus and total surplus; i.e. what each component represents. For additional points, what happens if the minimum wage is set below the free market price? please graph

Explain what is consumer surplus, producer surplus and total surplus. Show graphically how a price floor...

Explain what is consumer surplus, producer surplus and total surplus. Show graphically how a price floor reduces total surplus.

Using an example and appropriate figure explain the concepts of consumer surplus, producer surplus and deadweight...

Using an example and appropriate figure explain the concepts of consumer surplus, producer surplus and deadweight loss. How does deadweight loss arise? Discuss.

When prices rise above equilibrium: A. producer surplus falls and consumer surplus rises. B. producer surplus...

When prices rise above equilibrium: A. producer surplus falls and consumer surplus rises. B. producer surplus falls and it is uncertain what happens to consumer surplus. C. consumer surplus falls and it is uncertain what happens to producer surplus. D. producer surplus falls and consumer surplus falls. Say which answer choice it is and why.

Describe the effects (changes in quantity, price, consumer surplus, and producer surplus) of a product ban...

Describe the effects (changes in quantity, price, consumer surplus, and producer surplus) of a product ban on asbestos insulation in each of the following markets: a. Market for Asbestos Insulation b. Market for Asbestos Fiber c. (6 points) Market for Asbestos Clothing d. Assuming the above are the only markets impacted by the ban on asbestos insulation, what is the Total Cost to society? e. Explain how you would determine if there is a Net Benefit or a Net Cost...

How does the deadweight loss of a tax increase relative to the tax revenue from the...

How does the deadweight loss of a tax increase relative to the tax revenue from the tax as the size of the tax increases?

When it comes to supply and demand, government policies including trade, consumer and producer surplus play...

When it comes to supply and demand, government policies including trade, consumer and producer surplus play a key role. provide a real example of how consumer and producer surplus is used in the economy and why? Give and briefly discuss the importance of inelastic and elastic when it comes to purchasing certain goods and or services. Provide a real-world example beyond the text listing a pro and con of each one in your own words.

Question