4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Venezuela. Venezuela is open to international trade of soybeans without any restrictions. The world price (Pw) of soybeans is $530 per ton 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 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. 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 ton) 845 810 775 740 705 670 635 600 565 530 495 ++ Supply + Demand Pw W 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Thousands of tons of soybeans) A tariff set at this level would raise $ Graph Input Tool Market for Soybeans in Venezuela Price (Dollars per ton) Domestic Demand (Thousands of tons of soybeans) If Venezuela is open to international trade of soybeans without any restrictions, it will import the full value for your answer, accounting for the horizontal axis units.) 775 60 Domestic Supply (Thousands of tons of soybeans) in revenue for the Venezuelan government. (?) 240 Suppose the Venezuelan government wants to reduce imports to exactly 60,000 tons of soybeans to help domestic producers. A tariff of $ ton will achieve this. tons of soybeans. (Note: Be sure to enter per
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Venezuela. Venezuela is open to international trade of soybeans without any restrictions. The world price (Pw) of soybeans is $530 per ton 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 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. 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 ton) 845 810 775 740 705 670 635 600 565 530 495 ++ Supply + Demand Pw W 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Thousands of tons of soybeans) A tariff set at this level would raise $ Graph Input Tool Market for Soybeans in Venezuela Price (Dollars per ton) Domestic Demand (Thousands of tons of soybeans) If Venezuela is open to international trade of soybeans without any restrictions, it will import the full value for your answer, accounting for the horizontal axis units.) 775 60 Domestic Supply (Thousands of tons of soybeans) in revenue for the Venezuelan government. (?) 240 Suppose the Venezuelan government wants to reduce imports to exactly 60,000 tons of soybeans to help domestic producers. A tariff of $ ton will achieve this. tons of soybeans. (Note: Be sure to enter per
Chapter1: Making Economics Decisions
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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 soybeans in Venezuela. Venezuela is open to international trade of soybeans
without any restrictions. The world price (Pw) of soybeans is $530 per ton 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 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.
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 ton)
845
810
775
740
705
670
635
600
565
530
495
+++
I
I
I
1
1
Supply
++
I
1
Demand
A tariff set at this level would raise $
PW
0 30 60 90 120 150 180 210 240 270 300
QUANTITY (Thousands of tons of soybeans)
Graph Input Tool
Market for Soybeans in Venezuela
Price
(Dollars per ton)
Domestic Demand
(Thousands of tons
of soybeans)
If Venezuela is open to international trade of soybeans without any restrictions, it will import
the full value for your answer, accounting for the horizontal axis units.)
775
60
Domestic Supply
(Thousands of tons
of soybeans)
in revenue for the Venezuelan government.
?
240
Suppose the Venezuelan government wants to reduce imports to exactly 60,000 tons of soybeans to help domestic producers. A tariff of $
ton will achieve this.
tons of soybeans. (Note: Be sure to enter
per
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