(a) Using a demand/supply diagram, illustrate and explain the effects of the imposition of an export tax on a good Y by a home countryâ€™s government on
(i) the home countryâ€™s consumers of Y,
(ii) the home countryâ€™s producers of Y, and
(iii) the home governmentâ€™s tax revenues.
Assume that the country is a â€œsmallâ€ country. Then evaluate the â€œnet welfare effectâ€ 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 â€œlargeâ€ country rather than a â€œsmallâ€ country. Is it an advantage or a disadvantage for a country to be â€œlargeâ€ rather than â€œsmallâ€ when it imposes an export tax? Explain.
Provide your explanations and definitions in detail and be precise
. Explain in your own words. Provide references for content when necessary. Support your statements with peer-reviewed in-text citation(s) and reference(s).