Using a demand/supply diagram, illustrate and explain the effects of the imposition of an export tax on a good Y by a home country’s government on (i) the home country’s consumers of Y, (ii) the home country’s producers of Y, and (iii) the home government

Using a demand/supply diagram, illustrate and explain the effects of the imposition of an export tax on a good Y by a home country’s government on (i) the home country’s consumers of Y, (ii) the home country’s producers of Y, and (iii) the home government’s tax revenues. (Assume that the country is a “small? country.) Then evaluate the “net welfare effect? of the tax on the country. Why might a country want to impose an export tax? Explain.

(b) Suppose now that the country imposing the export tax in part (a) of this question is a “large? country rather than a “small? country. Is it an advantage or a disadvantage for a country to be “large? rather than “small? when it imposes an export tax? Explain.

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