Open economy policy options
1. Consider the following domestic market diagram for
a small-country importer:
Indicate which numbered arrow above corresponds
to each of the following policy options:
___ a. an import tariff
___ b. a production tax
___ c. a consumption tax
___ d. a production subsidy
___ e. a consumption subsidy
2. Consider the following domestic market diagram
for a small-country exporter:
Indicate which numbered arrow above corresponds
to each of the following policy options:
___ a. an export tax
___ b. a production tax
___ c. a consumption tax
___ d. an export subsidy
___ e. a production subsidy
___ f. a consumption subsidy