The graph to the right depicts the relative world demand and supply curves for flowers. Home currentlyexports the labor intensive flowers and Foreign exports the land intensive soybeans. The currentequilibrium in the market occurs at point XRecall that the relative quantity of flowers is computed as (Q,+Q,)/(a+a). while the relative priceof flowers is computed P,/PSuppose that Home places an import tariff on soybeans.1.) Using the line drawing tool, draw the new relative demand curve. Label it RD,2.) Using the line drawing tool, draw the new relative supply curve. Label it RS,3.) Using the point drawing fool, plot the new market equilibrium point indicating the new terms of tradeLabel the point Z.Carefully follow the instructions above and only draw the required objects.The impact on the terms of trade of an import tariff depends onOA. how large of a tariff is placed on the good.B. how many countries produce the good.OC. the number of units of the good available,D. how large a tariff imposing country is to the rest of the world.Effects of an Import TariffRelative price of flowersRelative quantity of flowersRSRD

Equilibrium is the point in which market supply and demand equate each other, and as a result prices…

live quantity of flowers is computed as (Q,+Q)/(Q+Q), while the relative price med P,/P places an import tariff on soybeans. mawing tool, draw the new relative demand curve Label it RD, wrawing tool, draw the new relative supply curve. Label it RS, drawing tool, plot the new market equilibrium point indicating the new terms of trade instructions above and only draw the required objects terms of trade of an import tariff depends on

live quantity of flowers is computed as (Q,+Q)/(Q+Q), while the relative price med P,/P places an import tariff on soybeans. mawing tool, draw the new relative demand curve Label it RD, wrawing tool, draw the new relative supply curve. Label it RS, drawing tool, plot the new market equilibrium point indicating the new terms of trade instructions above and only draw the required objects terms of trade of an import tariff depends on

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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