Depict on graph and briefly explain effects of import tariff (economic consequences for the importing country):
Change in consumer surplus (ACS);
• Change in producer surplus (APS);
Government revenue;
Production distortion, consumption distortion, and total deadweight loss (DWL).
Import tariff on a manufactured product in a country Y equals 15 % while tariff on imported raw materials to produce such a product is 2%. In price of the final product, value of imported raw materials makes up 50%. Calculate the effective rate of protection for domestic manufacturing in the country Y.