Question

use the following graph to show the effects of the $200 tariff. use the black line (plus symbol) to indicate the world price plus the tariff. then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (dwl) caused by the tariff.

Explanation:

Step1: Identify world - price plus tariff line

Draw a horizontal black line at a price level that is $200$ higher than the world - price ($P_w$).

Step2: Determine consumer surplus

Consumer surplus (CS) is the area above the price line (world - price plus tariff) and below the domestic demand curve. Mark the green points to enclose this area.

Step3: Determine producer surplus

Producer surplus (PS) is the area below the price line (world - price plus tariff) and above the domestic supply curve. Mark the purple points to enclose this area.

Step4: Calculate government revenue

Government revenue is the rectangular area. Its height is the tariff amount ($200$) and its base is the quantity of imports. Shade the orange quadrilateral for this area.

Step5: Identify deadweight loss

Deadweight loss (DWL) consists of two triangles. One is the loss from under - consumption and the other is the loss from over - production. Shade the tan points to enclose these areas.

This is a graphical exercise and no numerical answer is provided as the question only asks for graphical representation. The actual drawing of the lines and shading of areas should be done on the given graph.

Answer:

Step1: Identify world - price plus tariff line

Draw a horizontal black line at a price level that is $200$ higher than the world - price ($P_w$).

Step2: Determine consumer surplus

Consumer surplus (CS) is the area above the price line (world - price plus tariff) and below the domestic demand curve. Mark the green points to enclose this area.

Step3: Determine producer surplus

Producer surplus (PS) is the area below the price line (world - price plus tariff) and above the domestic supply curve. Mark the purple points to enclose this area.

Step4: Calculate government revenue

Government revenue is the rectangular area. Its height is the tariff amount ($200$) and its base is the quantity of imports. Shade the orange quadrilateral for this area.

Step5: Identify deadweight loss

Deadweight loss (DWL) consists of two triangles. One is the loss from under - consumption and the other is the loss from over - production. Shade the tan points to enclose these areas.

This is a graphical exercise and no numerical answer is provided as the question only asks for graphical representation. The actual drawing of the lines and shading of areas should be done on the given graph.