题目内容
Although an import tariff provides the domestic government additional tax revenue, it benefits domestic consumers at the expense of domestic producers.
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An import tariff reduces the welfare of a "small" country by an amount equal to the redistribution effect plus the revenue effect.
The deadweight losses of an import tariff consist of the protection effect plus the consumption effect.
Suppose that the tariff on imported steel is 40 percent, the tariff on imported iron ore is 20 percent, and 30 percent of the cost of producing a ton of steel consists of the iron ore it contains. The effective rate of protection of steel is approximately 49 percent.
The redistribution effect is the transfer of producer surplus to domestic consumers of the import-competing product.
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