1 4. Effects of a tariff on international tradeThe following graph shows the domestic supoly of and demand for wheat in Kenya, The worlid price (Pw) of wheat is $250 per bushel and isrepresented by the horizontal black line. Throughout the question, asume that the amount demanded by any one country does not afect the worldprice of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Ase, assume that domesticsuppliers will satisfy domestic demand as much as possible before any exporting or importing takes placeDomestc SuppyEN475Domestic Demand490475Domestic DemandDomestic Supply45042540037535032530027525022550100150200 250300350400450500QUANTITY (Bushels of wheat)If Kenya is open to international trade in wheat without any restrictions, it will importbushels of wheat.Suppose the Kenyan government wants to reduce imports to exactly 100 bushels of wheat to help domestic producers. A tariff of 5per bushelwill achieve this.A tariff set at this level would raisesin revenue for the Kenyan govemment.PRICE (Dollars per bushel)

Answered: Image /qna-images/answer/ac5f3f31-6564-4efe-b6cc-dcfb7c4b1176.jpg

following graph shows the domestic supply of and demand for wheat in Kenya, The world price (Pw) of wheat is $250 per bushel and is esented by the horizontal black line. Throughout the question, asume that the amount demanded by any one country does not afect the world eof wheat and that there are no transportation or transaction costs associated with international trade in wheat. Alse, assume that domestic pliers will satisfy domestic demand as much as possible before any eporting or importing takes place Domestic Demand Domestc Supoy