1 / 6

Optimum Tariff

Optimum Tariff. Derivations. Imports and Exports. Home Demand. Home Supply. Home Imports . Foreign Exports. Domestic and World Prices. loss. loss. gain. Tariff and Prices. --Home Imports=Foreign Exports:. Pre-tariff world price and post tariff home price:. :Post tariff world price.

rock
Download Presentation

Optimum Tariff

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Optimum Tariff Derivations

  2. Imports and Exports Home Demand Home Supply Home Imports Foreign Exports Domestic and World Prices

  3. loss loss gain

  4. Tariff and Prices --Home Imports=Foreign Exports: Pre-tariff world price and post tariff home price: :Post tariff world price

  5. The tariff and domestic welfare

  6. Gain-Loss=tU-t2V Where U and V are positive expressions independent of the level of tariff, t. If t is small enough the first term exceeds the second term. Conclusion: the optimum tariff is positive!

More Related