a. A tariff imposed on the import of leather shoes will cause
a(n) in the domestic price. Total quantity of leather
shoes sold in Canada will. Domestic (Canadian)
production of leather shoes will and the quantity of
shoes imported will.
b. The beneficiaries of the tariff described above are
because they receive a higher price for the same good and
because they receive tariff revenue. The parties
that are clearly worse off are because they now pay
a higher price for the same good and because they
sell less in the Canadian market.
c. The overall effect of a tariff on the importing country is
a(n) in economic surplus. The tariff creates a(n)
loss for the economy.
d. Suppose an import quota restricted the import of leather
shoes into Canada to 20 000 pairs per year when the free
trade imported amount was 40 000 pairs. The domestic
price will , total quantity sold in Canada will
and domestic production will.
e. The beneficiaries of the quota described above are
and because they both receive a higher price in the
Canadian market. The party that is clearly worse off is
because they are now paying a higher price.
f. The overall effect of an import quota on the importing
country is a(n) in economic surplus. The quota
imposes a(n) loss for the economy.
3. Fill in the blanks to make the following statements correct.
