4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of limes in New Zealand. The world price (Pw) of limes is $800 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 1295 Domestic Demand 1185 1130 1075 Ø 1020 965 910 PRICE (Dollars per ton) 1240 855 800 745 + I 0 30 60 Domestic Supply 90 120 150 180 QUANTITY (Tons of limes) 180 210 240 270 300 A tariff set at this level would raise $ ? If New Zealand is open to international trade in limes without any restrictions, it will import Suppose the New Zealand government wants to reduce imports to exactly 120 tons of limes to help domestic producers. A tariff of $ will achieve this. tons of limes. in revenue for the New Zealand government. per ton

4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of limes in New Zealand. The world price (Pw) of limes is $800 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 1295 Domestic Demand 1185 1130 1075 Ø 1020 965 910 PRICE (Dollars per ton) 1240 855 800 745 + I 0 30 60 Domestic Supply 90 120 150 180 QUANTITY (Tons of limes) 180 210 240 270 300 A tariff set at this level would raise $ ? If New Zealand is open to international trade in limes without any restrictions, it will import Suppose the New Zealand government wants to reduce imports to exactly 120 tons of limes to help domestic producers. A tariff of $ will achieve this. tons of limes. in revenue for the New Zealand government. per ton

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table 34.6 and Table 34.7. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell? What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell? Sketch two supply and demand diagrams, one for each country, in the situation before trade. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade. If the Land of Submarines imposes an anti- dumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country. Does your general answer change if the Land of Submarines imposes an import quota of 70?
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4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Zambia. The world price (Pw) of soybeans is $530 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 980 Domestic Demand Domestic Supply 930 880 830 780 730 680 630 580 P. 530 480 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of soybeans) PRICE (Dollars per ton)
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