Question

Use the following data to complete the table by calculating US tariff revenues on rubber footwear, women’s shoes, and luggage, and the number of jobs saved

industry	Tariff rate (%)	Consumer Cost (million $)	Producer Gain (million $	DWL (million $)	Tariff Revenue (million $	Consumer Cost per job ($thousands	Number of Jobs Saved
Rubber Footwear	20	321.8	85.1	18.6		189.2
Women’s Shoes	10	581.7	108.3	17.0		157.2
Luggage	16.3	326.4	24.8	40.2		1444.3

Note: Values in the table converted to 2005 dollars using the U.S. GDP deflator. Source: Gary Hufbauer and Kimberly Ann Elliott, Measuring the Costs of protection in the United States (Washington, D.C.: Institute for International Economy, 1994). Quoted in Husted and Melvin (2013), pp. 128-129. Table constructed by Husted & Melvin

Answer 1

ANSWER: Now we have to determine the Tariff revenue (in million $) and Number of jobs saved.

1)Tariff revenue is the difference among the consumer post, producer gain and the dead weight cost.

-> Tariff Revenue = Consumer cost - Producer gain - Dead weight loss.

For rubber footwear tariff revenue is : 321.8 - 85.1 - 18.6 = 218.1.

For Women's shoes : 581.7 - 108.3 - 17 = 456.4.

For luggage tariff revenue is : 326.4 - 24.8 - 40.2 = 261.4.

2) Now we have to determine the no.of jobs saved which is equal to the ratio of loss of consumer surplus to the cost per domestic job saved.

No. of jobs saved= Loss of consumer surplus / consumer cost per job.

a) For footwear= 321.8 / 189.2 = 1.7

b) For women's shoes= 581.7 / 157.2 = 3.7

c) For luggage= 326.4 / 1444 = 0.227