Suppose the following figure shows the domestic market for hockey sticks in a certain country. The government has recently imposed tariffs on hockey sticks. While the world price of a hockey stick is $60, the price in this country (with the tariff) is $75.

a. How did the quantity of imports change when the government imposed a tariff?
b. How much does the government earn from the tariff?
c. How does the value of consumer surplus change after the tariff is introduced?
d. How does the value of producer surplus change after the tariff is introduced?
e. What is the value of the deadweight loss from the tariff?
f. What is the value of total surplus after the tariff? How will total surplus change if the tariff is eliminated and the price of hockey sticks falls to the world price?

Transcribed Image Text:

Price $160 60 35 125 200 425 500 Quantity (in 000s)