Question: The accompanying diagram illustrates the U.S. domestic demand curve and domestic supply curve for beef.
The world price of beef is PW . The United States currently imposes an import tariff on beef, so the price of beef is PT . Congress decides to eliminate the tariff. In terms of the areas marked in the diagram, answer the following questions.
a. With the elimination of the tariff what is the gain/ loss in consumer surplus?
b. With the elimination of the tariff what is the gain/ loss in producer surplus?
c. With the elimination of the tariff what is the gain/ loss to the government?
d. With the elimination of the tariff what is the gain/ loss to the economy as a whole?