Calculate the net national gain for country after the tariff

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Reference no: EM13772547

Consider a large country importing good X in the international market. The country is large enough to influence the international price for good X. Let the initial international price of good X be $100, where the country imports 100 units and produces 10 units. The government decides to impose 30% tariff on good X to protect domestic producers and jobs. After the tariff, the country imports 80 units and produces 20 units. The price that foreign producers receive after the tariff (when they sell it to this country) is $85 (note that this price is different from the market price in this country).

A) Calculate the net national gain (or loss) for the country after the tariff.

B) Calculate change in producer surplus for the foreign country selling good X.

C) Calculate the dead weight loss for the world.

Reference no: EM13772547

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