Each question carries 10 points for a total of 40 points.


Problem 1:

Consider a "large" country which imposes a specific tariff on imports.
Carefully analysing the impact of this tariff on (1) consumer surplus, (2)
producer surplus, (3) tariff revenue. Finally will this tariff raise or
lower social welfare? Why or Why not?


Problem 2:

Answer Question 3 on Page 217 of the textbook. This is Question 3 in the
Problems and Questions for Review at the end of Chapter 6. 


Problem 3: 

U.S. Presidential candidate and ardent protectionist Patrick Buchanan
argues "Tariffs are taxes but you don't have to pay them if you buy
American" (as quoted in the Wall Street Journal on June 2, 1998). Do you
agree? Why or why not? 

Problem 4: 

Answer parts A, B, C and D on Question 1 on Page 265 in Problems and
Questions for Review at the end of Chapter 7 in your text. Ignore Part E.