If Jordan is open to international trade in limes without any restrictions, it will import Suppose the Jordanian government wants to reduce imports to exactly 60 tons of limes to help domestic producers. A tariff of achieve this. A tariff set at this level would raise s revenue for the Jordanian government. tons of limes. per ton will

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Chapter1: Making Economics Decisions
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If Jordan is open to international trade in limes without any restrictions, it will import
Suppose the Jordanian government wants to reduce imports to exactly 60 tons of limes to help domestic producers. A tariff of s
achieve this.
A tariff set at this level would raise s
in revenue for the Jordanian government.
tons of limes.
per ton will
Transcribed Image Text:If Jordan is open to international trade in limes without any restrictions, it will import Suppose the Jordanian government wants to reduce imports to exactly 60 tons of limes to help domestic producers. A tariff of s achieve this. A tariff set at this level would raise s in revenue for the Jordanian government. tons of limes. per ton will
4. Effects of a tariff on international trade
The following graph shows the domestic demand for and supply of limes in Jordan. The world price (Pw) of limes is $770 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 limes and that there are no transportation or transaction costs associated with international trade in limes.
Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.
PRICE (Dollars perton)
1210
1155
1100
1045
900
935
800
825
770
000
0
Domestic Demand
30
60
Domestic Supply
90 120 150 160 210 240 270 300
QUANTITY (Tons of times)
Transcribed Image Text:4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of limes in Jordan. The world price (Pw) of limes is $770 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 limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars perton) 1210 1155 1100 1045 900 935 800 825 770 000 0 Domestic Demand 30 60 Domestic Supply 90 120 150 160 210 240 270 300 QUANTITY (Tons of times)
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