Answer to Question #65479 in Economics for saeed

Question

Which of the following is correct based on a partial equilibrium model of trade?
Question options:

1) A small country always loses by imposing a tariff


2) A large country always loses by imposing a tariff


3) A large country always gains by imposing a tariff.


4) A small country always gains by imposing a tariff.





Referring to the above Figure, the impact of the tariff on domestic producer surplus is a __________ measured by area __________.
Question options:

1) Gain; a


2) Loss; a


3) Gain; (a+b)


4) Loss; (a+b)

Answer 1

Which of the following is correct based on a partial equilibrium model of trade?
1) A small country always loses by imposing a tariff

Referring to the above Figure, the impact of the tariff on domestic producer surplus is a __________ measured by area __________.
4) Loss; (a+b)