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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