Attempts Average / 3 4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Colombia. The world price (Pw) of oranges is $535 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. (?)
Attempts Average / 3 4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Colombia. The world price (Pw) of oranges is $535 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. (?)
Chapter1: Making Economics Decisions
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Problem 1QTC
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4. Effects of a tariff on international trade
The following graph shows the domestic demand for and supply of oranges in Colombia. The world price (Pw) of oranges is $535 per ton and is
displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded
by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international
trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes
place.
PRICE (Dollars per ton)
850
815
780
745
710
675
640
605
570
535
500
0
Domestic Demand
Average / 3
40
80
Domestic Supply
P.
W
120 160 200 240 280 320 360 400
QUANTITY (Tons of oranges)
A tariff set at this level would raise $
?
If Colombia is open to international trade in oranges without any restrictions, it will import
Suppose the Colombian government wants to reduce imports to exactly 80 tons of oranges to help domestic producers. A tariff of $
will achieve this.
tons of oranges.
in revenue for the Colombian government.
per ton](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe3d16ba3-6908-4bb5-ae3b-544565049ba4%2F02e4d124-9d25-459a-a0aa-e649a23ddd6a%2Fs4zu50i_processed.png&w=3840&q=75)
Transcribed Image Text:Back to Assignment
Attempts
4. Effects of a tariff on international trade
The following graph shows the domestic demand for and supply of oranges in Colombia. The world price (Pw) of oranges is $535 per ton and is
displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded
by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international
trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes
place.
PRICE (Dollars per ton)
850
815
780
745
710
675
640
605
570
535
500
0
Domestic Demand
Average / 3
40
80
Domestic Supply
P.
W
120 160 200 240 280 320 360 400
QUANTITY (Tons of oranges)
A tariff set at this level would raise $
?
If Colombia is open to international trade in oranges without any restrictions, it will import
Suppose the Colombian government wants to reduce imports to exactly 80 tons of oranges to help domestic producers. A tariff of $
will achieve this.
tons of oranges.
in revenue for the Colombian government.
per ton
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