a. What quantity of leather shoes is imported before the
tariff is imposed? After the tariff?
b. What is the effect of the tariff on the Canadian production
of shoes? Which areas in the diagram show the increase
in domestic producer surplus?
c. Which areas in the diagram show the reduction in
domestic consumer surplus as a result of the higher
Canadian price?
d. The Canadian government earns tariff revenue on the
imported shoes. Which area in the diagram shows this
tariff revenue?
e. What is the overall effect of this tariff on the economy?
Which area in the diagram shows the deadweight loss?
6. Use the diagram from Study Exercise 5 to analyze the effects of
imposing an import quota instead of a tariff to protect domestic
rishikesh
(rishikesh)
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