Tariffs Small Country Case

1
Tariffs Small Country Case

• Econ 303, International Economics

2
Tariff impact on trade
P
S
5
Before tariff Q 50, M75 C125
2.50
0.50
After tariff Q75 M25 C100
2
D
125
50
Q
75
100
3
Tariff impact on economic welfare
Before tariff
P

After tariff
S
Net losses
5
Consumer surplus
2.50
Government revenues
2
Producer surplus
D
125
50
Q
75
100
4
Tariff impact on economic welfare
P

P
S
5
Consumer surplus
2.50
Government revenues
X
2
Producer surplus
M
D
125
75
25
Q
50
Q
75
100
5
Tariff impact on economic welfare
P

S
Consumer surplus
2.50
Government revenues
2
Producer surplus
D
125
50
Q
75
100