If Panama is open to international trade in maize without any restrictions, it will import Suppose the Panamanian government wants to reduce imports to exactly 60 tons of maize to help domestic producers. A tariff of $ achieve this. A tariff set at this level would raise $ tons of maize. in revenue for the Panamanian government. per ton will
If Panama is open to international trade in maize without any restrictions, it will import Suppose the Panamanian government wants to reduce imports to exactly 60 tons of maize to help domestic producers. A tariff of $ achieve this. A tariff set at this level would raise $ tons of maize. in revenue for the Panamanian government. per ton will
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The following graph shows the domestic supply of and demand for maize in Panama. The world price (Pw) of maize is $270 per ton and is represented
by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of maize
and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy
domestic demand as much as possible before any exporting or importing takes place.
540
Domestic Demand
Domestic Supply
510
480
450
E 420
390
360
330
270, 270
300
P..
w
270
240
30
60
90
120
150
180
210
240 270 300
QUANTITY (Tons of maize)
PRICE (Dollars per ton)
Transcribed Image Text:Domestic Demand
Domestic Supply
540
510
480
450
420
390
360
330
270, 270
300
P.
270
240
30
60
90
120
150
180
210
240
270
300
QUANTITY (Tons of maize)
If Panama is open to international trade in maize without any restrictions, it will import
tons of maize.
Suppose the Panamanian government wants to reduce imports to exactly 60 tons of maize to help domestic producers. A tariff of s
per ton will
achieve this.
A tariff set at this level would raise $
in revenue for the Panamanian government.
PRICE (Dollars per ton)
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