With free trade, the Home's consumer surplus equals $__ and the Foreign's producer surplus equals $__. With
Question:
With free trade, the Home's consumer surplus equals $__ and the Foreign's producer surplus equals $__. With a tariff of $enter your response here per flash drive, Home's consumer surplus equals $__, Foreign's producer surplus equals $__, Home's tariff revenue equals $__, and Home's deadweight loss equals $__. Of the Home's tariff revenue, $__ comes from Foreign producers, and the rest comes from Home's consumers.
Given the above, which of the following statements is true?
A. Home’s overall economy is worse off because the deadweight loss exceeds the tariff burden on Foreign producers.
B. Home’s overall economy is worse off because the deadweight loss is less than the tariff burden on Foreign producers.
C. Other/None of the above.
D. Home’s overall economy is better off because the deadweight loss exceeds the tariff burden on Foreign producers.
E. Home’s overall economy is better off because the deadweight loss is less than the tariff burden on Foreign producers.
Which of the following best describes an important lesson from the "large" country tariff model, in general?
A. In the large country model, consumers are always worse off and overall domestic welfare is always reduced with tariffs.
B. Other/None of the above.
C. In the large country model, consumers are always worse off but overall domestic welfare always remains unchanged with tariffs.
D. If the revenue effect exceeds the deadweight loss, overall domestic welfare will rise.
E. It is possible for a large country to improve its overall domestic welfare with a tariff, but that country’s consumers are always worse off.
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