If Honduras allows interr.ational trade in the market for soybeans, it will importtons of soybeans.Now suppose the Honduran government decides to impose a tariff of $200 on each imported ton of soybeans. After the tariff, the price Honduranconsumers pay for a ton of soybeans is $and Honduras will importtons of soybeans. 3. Welfare effects of a tariff in a small countrySuppose Ronduras is open to free trade in the world market for soybeans. Because of Honduras's small size, the demand for and supply of soybeans inHonduras do not affect the world price. The following graph shows the domestic soybeans market in Honduras. The world price of soybeans is Pw =$400 per ton.On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at thefree-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS).1200Domestic DemandDomestic Supply1100CS1000900PS80070060050040030020010012014016018020020406080QUANTITY (Tons of soybeans)PRICE (Dollars pe: ton)

Equilibrium is achieved at the output level where Qs equals Qd

nduras allows interrational trade in the market for soybeans, it will import tons of soybeans. suppose the Honduran government decides to impose a tariff of $200 on each imported ton of soybeans. After the tariff, the price Honduran umers pay for a ton of soybeans is $ , and Honduras will import tons of soybeans.

nduras allows interrational trade in the market for soybeans, it will import tons of soybeans. suppose the Honduran government decides to impose a tariff of $200 on each imported ton of soybeans. After the tariff, the price Honduran umers pay for a ton of soybeans is $ , and Honduras will import tons of soybeans.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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