Essentials of Economics 7th Edition by Gregory Mankiw

Exercise 6

Having rejected a tariff on textiles (a tax on imports), the president of Isoland is now considering the same-sized tax on textile consumption (including both imported and domestically produced textiles).
a. Using Figure 4, identify the quantity consumed and the quantity produced in Isoland under a textile consumption tax.
b. Construct a table similar to that in Figure 4 for the textile consumption tax.
c. Which raises more revenue for the government-the consumption tax or the tariff? Which has a smaller deadweight loss? Explain.