2. Suppose a vegetable fiber is traded in a competitive world market and imported into the U.S. at a world price of $9 p

[answerhappygod]

2. Suppose a vegetable fiber is traded in a competitive world
market and imported into the U.S. at a world price of $9 per pound.
The U.S. domestic demand is Qd = 40 – 2P and the domestic supply is
given by Qs = (2/3)P • If there were no trade restrictions how much
fiber would be imported into the U.S.? • If the U.S. imposes a
tariff of $3 per pound, what will be the U.S. price and level of
imports? • How much revenue will the government earn from the
tariff? • How large is the dead-weight loss? • If the U.S. has no
tariff but instead imposes an import quota of 8 million pounds,
what will be the U.S. domestic price? Hint: the new supply cure is
(2/3)P+8 • What is the loss of consumer surplus? • What is gain of
producer surplus for U.S. producers?