Assume that the price in autarky for a product is 50. The world price is 30 and at this price local supply is 100000 and local demand is 200000. The local government imposes a tariff of 5, increasing the price to 35. At this new price, local supply is 120000 and local demand is 170000. Provide numbers for the following with explanation. a) Change in consumer surplus (calculated how) b)Change in producer surplus (calculated how) c) Change in total welfare (calculated how) d) if for each 2000 units of local production 5 jobs are created how much does the creation of each job cost to society? e) would results change if the local government chose a quota instead of tariff, how much would the equivalent quota be? Please provide solution with explanation that how you calculated everything and with graph.
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Assume that the price in autarky for a product is 50. The world price is 30 and at this price local supply is 100000 and local demand is 200000.
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