4. Effects of a tariff on international tradeThe following graph shows the domestic demand for and supply of times in Jordan. The world price (Pw) of limes is $790 per ton and is displayed as ahorizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any onecountry 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)1110107010309:00950910BTO830790750710Domestic Demand0101100Domestic Supply150 200 250 300 350 400 450 500QUANTITY (Tons of times) If Jordan is open to international trade in limes without any restrictions, it will importSuppose the Jordanian government wants to reduce imports to exactly 200 tons of limes to help domestic producers. A tariff of sachieve this.A tariff set at this level would raise stons of limes.in revenue for the Jordanian government.per ton will

Import is the difference between the domestic demand and domestic supply. Import = Quantity demanded…

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 200 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

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 200 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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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