PTariff $15 World 10,000 1 25,000 60,000 12,000 42,000 With free trade, the tota

Question

PTariff $15 World 10,000 1 25,000 60,000 12,000 42,000 With free trade, the total quantity of imports would equal a. 60,000 units b. 50,000 units c. 25,000 units d. 10,000 units With free trade, the total value of imports would equal a. $625,000 b. $250,000 c. $500,000 d. $100,000 With the tariff, the quantity of imports falls to a. 30,000 units b. 12,000 units c. 25,000 units d. 42,000 units With the tariff, the government collects a. $150,000 b. $450,000 c. $210,000 d. $60,000 With the tariff, the sales of goods by domestic producers increases by a. 50,000 units b. 15,000 units c. 25,000 units d. 2,000 units

Explanation / Answer

imports happen when the demand is higher than supply at some price and the country is allowed to trade here,

1- at free trade the amount of imports happening is 60000-10000 = 50000

2- the value of imports is equal to the amount of imports multiplied bythe price and here it is ,50000*10 = 500000

3- with tarrif the amount of imports have fallen to 42000-12000 = 30000

4- now the amount that government collects is tarrif times the amount of imports so here it is (15-10)(30000) = 150000

5- without tarrif the sales of goods was 10000 and with tarrif it is 12000 as it can be seen from the supply curve and price line interaction,

so with tarrif the domestic prducers are now producing 2000 more units.

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