Question 2 Full explain this question only part B Send me part B 2. Assume that in autarky the price of each car is $8000 in the domestic market. With free trade,this price decreases to $5000, but if a $2000 tariff is imposed on car imports, the price of carsrises to $7000. This situation is depicted in figure below.P800070005000•Sw+t-SwCars20 35 40 45 60a. Show and calculate the revenue, redistribution, protective, and consumption effects ofthe tariff.b. Describe and estimate the welfare loss associated with the tariff

Tarii revenue is the product of tariff per unit and the quantity imported. Deadweight Loss is the…

Answered: b. Describe and estimate the welfare…

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b. Describe and estimate the welfare loss associated with the tariff

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 2PA

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Question

Question 2

Full explain this question only part B

Send me part B

2. Assume that in autarky the price of each car is $8000 in the domestic market. With free trade,
this price decreases to $5000, but if a $2000 tariff is imposed on car imports, the price of cars
rises to $7000. This situation is depicted in figure below.
P
8000
7000
5000
•Sw+t
-Sw
Cars
20 35 40 45 60
a. Show and calculate the revenue, redistribution, protective, and consumption effects of
the tariff.
b. Describe and estimate the welfare loss associated with the tariff

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