Imagine that the United States buys all of its coffee from other nations (IOW, US domestic
production of coffee is zero). Draw a graph showing how much it will import and how much it
will consume if it can trade freely with other nations (assume the world supply curve of coffee is perfectly elastic). Next, on your graph, assume a tariff is imposed on foreign coffee and the
tariff is large enough to make US imports of coffee equal to zero. Show what happens to US
domestic production of coffee and US consumption of coffee. On your graph show the area of deadweight loss. Show the area of wasted resources.
