This document contains a lecture on macroeconomics that discusses tariffs. It presents the concept of tariffs through three examples: (1) a basic supply and demand model with no tariffs, (2) adding local production but no imports, and (3) adding both local production and imports, with a $2 tariff per imported unit. For each example it calculates consumer surplus, producer surplus, and total surplus to show the impact of tariffs. The key point is that a tariff reduces total surplus by $4 in the third example compared to the first example without tariffs.

2. Macroeconomics Winter 2020

3. Opening Prayer

4. Start Recording

6. 1.Tell the Tariff Story in 3 chapters

7. Tariff

8. Tariff
Taxes on
Imports

10. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Quantity

11. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

12. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

13. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

14. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

15. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

16. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

17. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Consumer
Surplus

18. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Consumer
Surplus
($10 x 5) ÷ 2
= $25

19. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Consumer
Surplus
Producer
Surplus
($10 x 5) ÷ 2
= $25

20. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Consumer
Surplus
Producer
Surplus
($10 x 5) ÷ 2
= $25
($10 x 5) ÷ 2
= $25

21. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Consumer
Surplus
Producer
Surplus
($10 x 5) ÷ 2
= $25
($10 x 5) ÷ 2
= $25
Total Surplus
$50

22. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Price

23. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

24. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

25. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

26. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

27. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

28. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

29. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

30. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity

31. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
QuantityLocal 3

32. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
QuantityLocal 3 Foreign 4

33. Consumer
Surplus
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
QuantityLocal 3 Foreign 4

34. Consumer
Surplus
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
($14 x 7) ÷ 2
= $49
Local 3 Foreign 4

35. Consumer
Surplus
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
($14 x 7) ÷ 2
= $49
Producer
Surplus
Local 3 Foreign 4

36. Consumer
Surplus
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
($14 x 7) ÷ 2
= $49
($6 x 3) ÷ 2
= $9
Producer
Surplus
Local 3 Foreign 4

37. Consumer
Surplus
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
($14 x 7) ÷ 2
= $49
($6 x 3) ÷ 2
= $9
Total Surplus
= $58
Producer
Surplus
Local 3 Foreign 4

38. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
QuantityLocal 3 Foreign 4

39. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff

40. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff

41. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff

42. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff

43. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff
With
Tariff

44. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff
With
Tariff

45. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff
With
Tariff

46. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff
With
Tariff

47. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
$2 Tariff
With
Tariff

48. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4
$2 Tariff
With
Tariff

49. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff

50. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Consumer
Surplus

51. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Consumer
Surplus
Producer
Surplus

52. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Consumer
Surplus
Producer
Surplus
($12 x 6) ÷ 2
= $36

53. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Consumer
Surplus
Producer
Surplus
($12 x 6) ÷ 2
= $36
($8 x 4) ÷ 2 =
$16

54. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Consumer
Surplus
Producer
Surplus
($12 x 6) ÷ 2
= $36
($8 x 4) ÷ 2 =
$16
Total Surplus
$52

55. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff

56. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Tariff

57. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Tariff $2 x 2 = $4

58. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Tariff $2 x 2 = $4

59. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Tariff $2 x 2 = $4

60. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Tariff $2 x 2 = $4
$1 x 2 = $2

61. $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0 1 2 3 4 5 6 7 8 9 10
Demand
Quantity
Pizza Tariff
Local 4 Foreign 2
$2 Tariff
With
Tariff
Tariff $2 x 2 = $4
$1 x 2 = $2

62. Drawing

64. Chapter 20
International
Finance

65. Chapter 20
Exchange Rates
Arbitrage
Law of One Price

66. 100+ Currencies
https://www.tradingview.com/markets/currencies/cross-rates-overview-prices/

68. Arbitrage

69. Arbitrage

70. Arbitrage
Buy Low Sell High

71. Arbitrage
Buy Low Sell High
Time

72. Arbitrage
Buy Low Sell High
Time
Geography

73. $1.00
=
6.25Yuan
1.00Yuan
=
$0.16

79. $5.00 Yuan 20

80. $5.00 Yuan 20

81. $5.00
x
6.25
=
Yuan 31.25
Yuan 20
÷
6.25
=
$3.20

82. $5.00
x
6.25
=
Yuan 31.25
Yuan 20
÷
6.25
=
$3.20

83. $5.00
x
6.25
=
Yuan 31.25
Yuan 20
÷
6.25
=
$3.20

84. $5.00
x
6.25
=
Yuan 31.25
Yuan 20
÷
6.25
=
$3.20

85. $5.00
x
6.25
=
Yuan 31.25
Yuan 20
÷
6.25
=
$3.20

86. $5.00 $3.20

87. $5.00 $3.20

89. one
unit
of
this

90. one
unit
of
this
will buy ___ units of that

91. https://www.tradingview.com/markets/currencies/cross-rates-overview-prices/

92. Exchange Rates

93. Exchange Rates

94. Exchange Rates
Two Trades

95. Why buy Dollars?

96. Why buy Dollars?

97. Why buy Dollars?
Buy American Stuff

98. Why buy Dollars?
Buy American Stuff
Invest in America

99. Why buy Dollars?
Buy American Stuff
Invest in America
Hold and Hope

100. Why buyYuan?

101. Why buyYuan?
Buy Chinese Stuff

102. Why buyYuan?
Buy Chinese Stuff
Invest in China

103. Why buyYuan?
Buy Chinese Stuff
Invest in China
Hold and Hope