Demonstrate the change in consumer surplus

Reference no: EM133319002

Consider a trade policy that would enact an "export tariff". That is, the government would impose a fine, τ on each unit of a good exported.

Question 1: Demonstrate the change in exports due to this export tariff for a small open economy.

Question 2: Re-draw your graph from part a) and demonstrate the change in consumer surplus and producer surplus due to the export tariff

Question 3: Re-draw your graph from part a) and demonstrate the tariff revenue collected. Indicate the area that represents change in total surplus due to the export tariff, relative to free trade

Reference no: EM133319002

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