申論題

一、Assume that Country A is a small open economy. It is an importer of cars. There are no trade restrictions. The consumers in country A buy 1,000 cars per year, of which 400 are produced domestically and 600 are imported.

(二) In responding to the fall in price, the government in Country A imposes a specific tariff of $50 on imported cars. Calculate the tariff revenue and the deadweight loss caused by the tariff policy. Is it a good policy from the standpoint of country A’s total welfare? Who might support the tariff policy? Why? (15 points)