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3. This question is about taxes and international trade. You can use the simple model of international trade we described in class (which assumes perfectly elastic supply of the good from the world market). (a) Explain, using a diagram, the impacts of a constant tariff of $T per unit on imports. [5 marks] (b) Assume instead of a tariff that the government imposes a constant tax of $T per unit on both imports and local production of the good. Show using a diagram the equilibrium in this situation. Explain your answer and contrast it with the tariff situation. [5 marks] (c) Compare the welfare implications of the tariff from part (a) of this question with the tax from (b) of this question. Briefly explain. [5 marks

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