only need the answer of g.h.i 2. In the diagram given below Dd represents the do
ID: 1112487 • Letter: O
Question
only need the answer of g.h.i
2. In the diagram given below Dd represents the domestic demand curve and Sd represents the domestic supply curve. Use this diagram to answer the following questions (a) Under free trade situation, this country will exportunits at Pw price.(2 points) (b) Consumer surplus at Pvv price is $ (2 points) (c) Producer surplus at the Pw price is $ (2 points) (d) Suppose the government imposes an export tax equal to (). This country will export (e) Consumer surplus at after-tax price of Pw-t is S (t) Producer surplus at after-tax price of Pw-t is$ (g) The amount of export tax per unit is$ 2 points) units at the after-tax price of Pw-t. (2 points) (2 points) : (2 points) (h) The total revenue from the tax is $- (2 points) (i) The deadweight loss from the tax is $ (2 points) Sd 65 60 50 Pw Pw-t 10 Dd 0 50 100 220 270 Q(in thousands)Explanation / Answer
Answer
g)
The amount of export tax=world price-price after tax
=60-50
=$10
h)
Total revenue from tax=export*tax per unit
export=quantity supplied-qauntity demanded
=220-100=120
tax revenue=120*10=1200
i)
Deadweight loss from tax=0.5*tax rate*change in export
bafore tariff export=270-50=220
change in export=220-120=100
DWL=0.5*10*100
=$500
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