%OV II. LTE2 2 . N DA V:07 . . . (o) Part 1: Essays The essay part of the final exam will represent 50% of the final exam grade. Please, type your answers if possible and illustrate the graphs by hand. Please, develop the following two essay responses. You are allowed to use any academic, web, or media resources as you see fit. Please, give reference to the resources as needed. 1. Explain how tariffs work. What is a tariff? Who pays for it? Can you give examples of tariffs the United States has with other nations and discuss which ones are considered to be controversial and why ? Does a tariff bring any benefits and who does it benefit? Do tariffs impact long-run economic growth and how? What is the different impact of a tariff for a country that represents a large share of the international market of the tariffed good vs. a country that represents a small share? Please, illustrate with graphs. 2. Explain how subsidies work. What is a subsidy? Who pays for it and who benefits from it? Can you give examples of subsidized goods in the United States? What impact do the subsidies have on the international trade of the US with other nations? What are the long-run impacts of a subsidy? What is the difference between the impact of subsidies imposed by countries that represent a large share of the international markets of the subsidized goods vs. countries that represent a small share? Please, illustrate with graphs. m III O