Explain the impact for producers, consumers, and the government of a tariff imposed on imported lumber.

What will be an ideal response?

Answers will vary but should indicate that consumers lose more than both producers and the government gain from a tariff. Tariffs imposed on imported lumber pose a barrier to market entry for foreign suppliers, which strengthens the position of domestic suppliers who increase supply at higher prices, and thus, gain from the tariffs. The government also gains the revenues generated by the tariff payments from foreign sources. However, these gains do not make up for the losses experienced by consumers who are subject to higher lumber, wood furniture, and paper prices and a loss of consumer surplus.