The nation of Acirema is “small” and unable to affect world prices. It imports peanuts at the price of $10 per bag. The demand curve is D = 400 - 10 P . The supply curve is S = 50 + 5 P . Determine the free trade equilibrium. Then calculate and graph the following effects of an import quota that limits imports to 50 bags. a. The increase in the domestic price. b. The quota rents. c. The consumption distortion loss. d. The production distortion loss. The United States has taken action to restrict imports of certain Chinese goods, such as toys containing lead and seafood that doesn’t meet health standards, in order to protect U.S. consumers. Some people have said this shows a double standard: If we’re willing to restrict goods on these grounds, why shouldn’t we restrict imports of goods that are produced with badly paid labor? Why is or isn’t this argument valid? Suppose the government imposes a tariff on all imports. Use the DD-AA model to analyze the effects this measure would have on the economy. Analyze both temporary and permanent tariffs.