Respuesta :
Answer:
a) The gross cost per household per year of this policy is $2 per household.
b) The policy's benefit per sugar producer per year is $2,500 per producer.
Explanation:
This tariff policy affects households, that loss consumer surplus, and sugar producers, which have a producer surplus gain.
The loss in consumer surplus due to the tariff will be $100,000 per year.
If there are 50,000 households in Sugarland, the cost per household is:
[tex]Cost \,per\,household=Consumer\,surplus \,loss/Number\,of\,households\\Cost \,per\,household=100,000/50,000= \$ 2/household[/tex]
The gross cost per household per year of this policy is $2 per household.
The benefit per sugar produced can be calculated as the total benefit per year (producer surplus) divided by the total amount of sugar producers:
[tex]Benefit \,per\,sugar\,producer=Producer\,surplus\,gain/Producers\\\\Benefit \,per\,sugar\,producer=25,000/10=\$ 2,500/producer[/tex]
The policy's benefit per sugar producer per year is $2,500 per producer.
Suppose the nation of Sugarland consists of 50,000 households, 10 of whom are sugar producers.
- The gross cost per household per year of the proposed policy is $2
- The policy's benefit per sugar producer per year is $2,500
1) The gross cost per household per year of the proposed policy:
Gross cost per household=Loss in surplus/Number of households
Gross cost per household=$100,000/50,000
Gross cost per household=$2
2) The policy's benefit per sugar producer per year:
Policy benefit per sugar produced=Gain in producer surplus/Number of sugar producer
Policy benefit per sugar produced=$25,000/10
Policy benefit per sugar produced=$2,500
Inconclusion suppose the nation of Sugarland consists of 50,000 households, 10 of whom are sugar producers.
- The gross cost per household per year of the proposed policy is $2
- The policy's benefit per sugar producer per year is $2,500
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