A country currently has free trade in men’s t-shirts, and the country imports half of its total domestic consumption. The government of the country has fully committed to the goal of reducing the quantity imported of t-shirts by one-third. The government is considering either a subsidy to domestic production or a tariff on imports to achieve its goal.

A friend who works in the foreign ministry knows that you are studying international economics, and she asks you to write a report comparing and contrasting the two policy alternatives (production subsidy or tariff). To make the report more authoritative, you are going to use at least one graph and one or more key concepts that you just learned in this chapter. What will you write and show in your report?