Assignment:
The graph above shows the demand and supply of wrenches for the country of Spain.
1. If trade is avoided, Spain consumes______ wrenches at a price of______ per wrench.
2. With free trade, for a world price of $4 per wrench, Spain is producing______ wrenches.
3. With free trade, for a world price of $4 per wrench, Spain is consuming_______ wrenches.
4. With free trade, for a world price of $4 per wrench, Spain is importing_________ wrenches.
5. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, Spain produces______ and imports________ wrenches.
6. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, how much tariff revenue will the Spain's government collect?_______.