4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. Honduras is open to international trade of soybeans without any restrictions. The world price (Pw) of soybeans is $520 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 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 an 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) 880 835 790 745 700 655 610 565 520 475 430 + I I Supply Demand 1 P W 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Thousands of tons of soybeans) Graph Input Tool Market for Soybeans in Honduras Price (Dollars per ton) Domestic Demand (Thousands of tons of soybeans) A tariff set at this level would raise $ 790 60 Domestic Supply (Thousands of tons of soybeans) (?) 240 If Honduras is open to international trade of soybeans without any restrictions, it will import tons of soybeans. (Note: Be sure to enter the full value for your answer, accounting for the horizontal axis units.) Suppose the Honduran government wants to reduce imports to exactly 60,000 tons of soybeans t help domestic producers. A tariff of $ per ton will achieve this. in revenue for the Honduran government
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. Honduras is open to international trade of soybeans without any restrictions. The world price (Pw) of soybeans is $520 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 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 an 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) 880 835 790 745 700 655 610 565 520 475 430 + I I Supply Demand 1 P W 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Thousands of tons of soybeans) Graph Input Tool Market for Soybeans in Honduras Price (Dollars per ton) Domestic Demand (Thousands of tons of soybeans) A tariff set at this level would raise $ 790 60 Domestic Supply (Thousands of tons of soybeans) (?) 240 If Honduras is open to international trade of soybeans without any restrictions, it will import tons of soybeans. (Note: Be sure to enter the full value for your answer, accounting for the horizontal axis units.) Suppose the Honduran government wants to reduce imports to exactly 60,000 tons of soybeans t help domestic producers. A tariff of $ per ton will achieve this. in revenue for the Honduran government
Chapter1: Making Economics Decisions
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 soybeans in Honduras.
Honduras is open to international trade of soybeans without any restrictions. The world price (Pw)
of soybeans is $520 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)
880
835
790
745
700
655
610
565
520
475
430
+
I
I
Supply
Demand
1
P
W
0 30 60 90 120 150 180 210 240 270 300
QUANTITY (Thousands of tons of soybeans)
Graph Input Tool
Market for Soybeans in Honduras
Price
(Dollars per
ton)
Domestic
Demand
(Thousands
of tons of
soybeans)
A tariff set at this level would raise $
790
60
Domestic
Supply
(Thousands
of tons of
soybeans)
(?)
240
If Honduras is open to international trade of soybeans without any restrictions, it will
import
tons of soybeans. (Note: Be sure to enter the full value for your answer,
accounting for the horizontal axis units.)
Suppose the Honduran government wants to reduce imports to exactly 60,000 tons of soybeans to
help domestic producers. A tariff of $
per ton will achieve this.
in revenue for the Honduran government.
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