ECON 101 Lecture Notes - Lecture 17: Deadweight Loss, Economic Surplus, Import License
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ECON 101 Full Course Notes
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Econ 101 - lecture #17 - import tariff and externality. To protect the domestic producers, governments may sometimes implement tariff on imports. So imports" prices will be higher and become less of a competition to domestic producers. It is imposed on imports only; do not confuse it with exports. Government becomes an involved party as well in this case. Figure 4 presents the changes of a supply and demand after import tariff is imposed, and table 3 presents how the consumer and producer surpluses changed. Changes to the supply and demand model of a country after import tariff is imposed. A table presenting how consumer and producer surpluses change after import tariff is imposed. Table 3 is that if tariff is imposed on an importing country. Total revenue will decrease by an amount called deadweight loss. As aforementioned with the discussions on tax, government interventions dislocated the norms of the market and cause inefficiency.
