Explain why a government would impose an import tariff when ...

[KWilfred]

Explain why a government would impose an import tariff when domestic consumers suffer more than producers gain.
 
  What will be an ideal response?

Question 2

Supporters of import restrictions and protectionist policies place greater weight on producer welfare than on consumer welfare. Comment.
 
  What will be an ideal response?

[ebonylittles]

Answer to Question 1

The tariff may be a product of producer rent seeking. Each producer will gain a relatively large amount compared to the loss of each consumer. The producers may be able to coordinate their rent seeking activities. Each consumer will only lose a relatively small amount so it is unlikely that consumers will coordinate a protest to the tariff.

Answer to Question 2

Import restrictions increase the producer surplus of domestic producers. Consumer surplus, however, decreases by more than producers gain. Thus, the statement seems to be correct.

[KWilfred]

Correct answers!

[ebonylittles]

Great! Please up vote