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Suppose that Congress imposes a tariff on imported autos to protect the U.S. auto industry from foreign competition. Assuming that the united states a price taker in the work auto market, show on a diagram: the change in the quantity of imports, the loss of U.S. consumers, the gain to U.S. manufactures, government revenue, and the deadweight loss associated with the tariff. The loss to consumers can be decomposed into three pieces: a transfer to domestic producers, a transfer to the government, and the deadweight loss. Use your diagram to identify these three pieces.
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Asked 12/16/2008 9:19:32 AM
Updated 232 days ago|10/28/2025 6:07:20 AM
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User: Suppose that Congress imposes a tariff on imported autos to protect the U.S. auto industry from foreign competition. Assuming that the united states a price taker in the work auto market, show on a diagram: the change in the quantity of imports, the loss of U.S. consumers, the gain to U.S. manufactures, government revenue, and the deadweight loss associated with the tariff. The loss to consumers can be decomposed into three pieces: a transfer to domestic producers, a transfer to the government, and the deadweight loss. Use your diagram to identify these three pieces.

Weegy: [www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_19/PThy_Chap_19.html]

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Asked 12/16/2008 9:19:32 AM
Updated 232 days ago|10/28/2025 6:07:20 AM
1 Answer/Comment
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When the U.S. imposes a tariff on imported autos, the price rises from the world price to the tariff-inclusive price, reducing imports, increasing domestic production, and decreasing consumption; the loss to consumers is split into a gain to domestic producers, government revenue from the tariff, and deadweight loss, while the deadweight loss reflects both inefficient domestic production and reduced consumption.
Added 232 days ago|10/28/2025 6:07:19 AM
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