A$.$Consider a large open economy Paperland exporting paper. Discuss the net welfare implications of an export tariff on paper imposed by Paperland with the help of a diagram. Is there any rationale for the domestic producers of Paperland to oppose this export tariff imposed?

B$.$ Consider Country A producing Good X which imposes a negative externality in the form of pollution. With the opening up of the economy for free trade, Country A becomes an importer of Good X$.$ Illustrate with the help of a diagram how free trade of Good X might make this country better off.

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A Export Tariff on Paper in Paperland Imposing an export tariff on paper in Paperland would lead to ... View the full answer