4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for wheat in Bangladesh. The world price (Pw) of wheat is $270 per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the wor 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. ? 540 Domestic Demand Domestic Supply 510 480 450 420 390 360 330 300 270 240 PRICE (Dollars per bushel) P₁ W + 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bushels of wheat) 400 bushels of wheat. If Bangladesh is open to international trade in wheat without any restrictions, it will import Р Suppose the Bangladeshi government wants to reduce imports to exactly 200 bushels of wheat to help domestic producers. A tariff of bushel will achieve this. in revenue for the Bangladeshi government. A tariff set at this level would raise $

4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for wheat in Bangladesh. The world price (Pw) of wheat is $270 per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the wor 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. ? 540 Domestic Demand Domestic Supply 510 480 450 420 390 360 330 300 270 240 PRICE (Dollars per bushel) P₁ W + 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bushels of wheat) 400 bushels of wheat. If Bangladesh is open to international trade in wheat without any restrictions, it will import Р Suppose the Bangladeshi government wants to reduce imports to exactly 200 bushels of wheat to help domestic producers. A tariff of bushel will achieve this. in revenue for the Bangladeshi government. A tariff set at this level would raise $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for maize in Bangladesh. Bangladesh is open to international trade of maize without any restrictions. The world price (Pw) of maize is $260 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 maize and that there are no transportation or transaction costs associated with international trade in maize. 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) 500 470 440 410 380 350 320 290 260 230 200 0 + Supply…
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1
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