Question

Question 6

1. Rent Seekers in the domestic Shirt industry have requested that the government place a $2.00 per item Tariff on imported Shirts. Describe and explain the winners and losers from this action. A diagram would assist your answer here and attract further marks.
2. In general why would Governments place Tariffs on any items? What could be the impact of such Tariff actions by Governments?
3. How might a Tariff on a large volume high value imported item affect the supply and demand for Australian dollars? A diagram would assist your answer here and attract further marks.

Answer 1

please refer to the picture,the answer of(a), alongwith the diagrams of before and after the rise in tariff.