Problem: The U.S. government has restricted imports of sugar and, as a consequence, U.S. consumers pay almost twice the world price of sugar in domestic markets.
What instrument of trade policy has the U.S. government used to restrict the imports of sugar into the U.S. domestic market? Using an appropriate diagram, analyze the welfare consequences of this policy for the U.S. economy. Using this diagram, explain how this policy has affected consumers, producers, and national welfare.