hello, i am struggling with this international EU economics question. 'The optimal tariff for a small country is zero. Prove this statement geometrically and then explain your results'
1
Expert's answer
2015-01-22T10:07:59-0500
By definition, a "small country" is one that is unable to influence the price of a good on the world market through buying or selling. This assures that the country will have a horizontal world supply curve at the price PW, regardless of its tariff policy. When a small country applies a tariff to a good, the world price will remain constant at Pw. Tariff revenue will simply be a transfer from consumers to the government. If the country's demand curve is downward sloping, the deadweight cost will always increase proportionately to tariff increases, even if there is no domestic supply. So, the statement is true.
Numbers and figures are an essential part of our world, necessary for almost everything we do every day. As important…
APPROVED BY CLIENTS
Finding a professional expert in "partial differential equations" in the advanced level is difficult.
You can find this expert in "Assignmentexpert.com" with confidence.
Exceptional experts! I appreciate your help. God bless you!
Comments
Leave a comment