4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for wheat in Bangladesh. Bangladesh is open to international trade of wheat without any restrictions. The world price (Pw) of wheat is $265 per bushel and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per bushel) Graph Input Tool Market for Wheat in Bangladesh (?) 490 465 Supply Price 390 (Dollars per bushel) 440 Domestic Demand (Thousands of bushels of wheat) 200 Domestic Supply (Thousands of bushels of wheat) 300 415 390 365 340 315 290 265 240 0 Demand P W 50 100 150 200 250 300 350 400 450 500 QUANTITY (Thousands of bushels of wheat) If Bangladesh is open to international trade of wheat without any restrictions, it will import the full value for your answer, accounting for the horizontal axis units.) bushels of wheat. (Note: Be sure to enter Suppose the Bangladeshi government wants to reduce imports to exactly 200,000 bushels of wheat to help domestic producers. A tariff of $ per bushel will achieve this. A tariff set at this level would raise $ in revenue for the Bangladeshi government.
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for wheat in Bangladesh. Bangladesh is open to international trade of wheat without any restrictions. The world price (Pw) of wheat is $265 per bushel and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per bushel) Graph Input Tool Market for Wheat in Bangladesh (?) 490 465 Supply Price 390 (Dollars per bushel) 440 Domestic Demand (Thousands of bushels of wheat) 200 Domestic Supply (Thousands of bushels of wheat) 300 415 390 365 340 315 290 265 240 0 Demand P W 50 100 150 200 250 300 350 400 450 500 QUANTITY (Thousands of bushels of wheat) If Bangladesh is open to international trade of wheat without any restrictions, it will import the full value for your answer, accounting for the horizontal axis units.) bushels of wheat. (Note: Be sure to enter Suppose the Bangladeshi government wants to reduce imports to exactly 200,000 bushels of wheat to help domestic producers. A tariff of $ per bushel will achieve this. A tariff set at this level would raise $ in revenue for the Bangladeshi government.
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
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Transcribed Image Text:4. Effects of a tariff on international trade
The following graph shows the domestic supply of and demand for wheat in Bangladesh. Bangladesh is open to international trade of wheat without
any restrictions. The world price (Pw) of wheat is $265 per bushel and is represented by the horizontal black line. Throughout this problem, assume
that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs
associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any
exporting or importing takes place.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
PRICE (Dollars per bushel)
Graph Input Tool
Market for Wheat in Bangladesh
(?)
490
465
Supply
Price
390
(Dollars per bushel)
440
Domestic Demand
(Thousands of
bushels of wheat)
200
Domestic Supply
(Thousands of
bushels of wheat)
300
415
390
365
340
315
290
265
240
0
Demand
P
W
50 100 150 200 250 300 350 400 450 500
QUANTITY (Thousands of bushels of wheat)
If Bangladesh is open to international trade of wheat without any restrictions, it will import
the full value for your answer, accounting for the horizontal axis units.)
bushels of wheat. (Note: Be sure to enter
Suppose the Bangladeshi government wants to reduce imports to exactly 200,000 bushels of wheat to help domestic producers. A tariff of $
per bushel will achieve this.
A tariff set at this level would raise $
in revenue for the Bangladeshi government.
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