Years of Poems and Spirits

Consumer Surplus: b/w top of demand curve and the market price
Producer Surplus: b/w bottom of supply curve and the market price

Effect of Tariff: Up market price -> reduced consumer surplus -> transfer to government (tariff income) and producer
Deadweight Losses: net cost to society of distorting free-market price. Efficiency loss.

According to Partial Equillibrium Theory in a small country setting:
Quota causes the same effect (through price adjusting to shortage of supply).
However, unlike in Tariff’s case, the government does not collect tax the increased price.
Quota Rent: what otherwise would be tariff income in quota scheme. May be recuperated through auction of import licensing.

Compared with the above two, export subside is a more attractive tool.
Government assistance lowers the supply curve. No change to consumer surplus. No deadweight losses. Only limited loss of efficiency.

In classical price-specie-flow model, the quantity theory of money states:
MsV = PY

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