heyy! can i please have some help with this, and tariff diagrams in general
For Q19:
Of course, from a societal point of view, the total surplus is maximised when there is no tariff. But being realistic we need the tariff there so that the producers get some surplus.
Note that the tariff of $15 on top of the world price essentially forces the production up to the intersection of the demand and supply curves. At a tariff of $15, there is
zero tax revenue generated from its implementation. This is because the tariff now makes it pointless for the country to participate in international trade; instead it may as well produce all the goods by itself. The government has basically forced the price up so high to the point that they only need to rely on domestic production, because recall that the intersection of the supply and demand curves is the point of market equilibrium in a
closed economy.
Which generates a massive deadweight loss from a societal perspective (given that trade is still an option), however is probably the best that a producer can ever get.
By reducing the tariff back to $10, the balance is shifted back in favour of the consumers by a bit. The supply graph analysis now looks like this. (Note that a bit of consumer surplus was increased.)
The blue area is the tariff revenue as we first note that the price per unit is $20, so we work across from there. What's between the supply and demand curves will give us the number of
units imported from the world. It would appear that we import (60-40) million, i.e. 20 million units from the world.
Of course, we must not forget that the world price was initially $10, but we added a tariff of $10.
So our answer is 20 million * $10 = $200 million.
(Note: I did this from university economics. Might be a bit advanced.)