Paper Problem: Global Economics
1. Using a demand/supply diagram, illustrate and explain the effects of the imposition of an export tax on a good Y by a home country's government on
a. the home country's consumers of Y,
b. the home country's producers of Y, and
c. the home government's tax revenues.
Assume that the country is a "small" country. Then evaluate the "net welfare effect" of the tax on the country. Why might a country want to impose an export tax? Explain.
2. Suppose now that the country imposing the export tax in part (1) of this question is a "large" country rather than a "small" country. Is it an advantage or a disadvantage for a country to be "large" rather than "small" when it imposes an export tax? Explain.
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.