You have been asked to quantify the effects of removing a country’s tariff on sugar.

The hard part of the work is already done: Somebody has estimated how many pounds of sugar would be produced, consumed, and imported by the country if there were no sugar duty. You are given the information shown in the table.

Calculate the following measures:

a. The domestic consumers’ gain from removing the tariff.

b. The domestic producers’ loss from removing the tariff.

c. The government tariff revenue loss.

d. The net effect on national well-being.

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Situation with Import Tariff $0.10 per pound $0.02 per pound $0.12 per pound 20 Estimated Situation without Tariff $0.10 per pound 0 $0.10 per pound 22 World price Tariff Domestic price Domestic consumption (billions of pounds per year) Domestic production (billions of pounds per year) Imports (billions of pounds per year) 8 12 66