PRICE (Dollars per ton)10851030975920865810755050100 150W200 250 300 350 400 450 500QUANTITY (Tons of limes)If Zambia is open to international trade in limes without any restrictions, it will importSuppose the Zambian government wants to reduce imports to exactly 100 tons of limes to help domestic producers. A tariff ofachieve this.A tariff set at this level would raise Sin revenue for the Zambian government.tons of limes.per ton will 4. Effects of a tariff on international tradeThe following graph shows the domestic demand for and supply of limes in Zambia. The world price (Pw) of limes is $810 per ton and is displayed asa horizontal 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 per ton)1305125011951140106510309759.20865810755Domestic DemandDomestic Supply

Equilibrium is achieved at a point where demand curve intersects the supply curve. At this point,…

PRICE (Dollars per ton) 1085 1030 975 920 865 810 755 0 50 100 150 W 200 250 300 350 400 450 500 QUANTITY (Tons of limes). If Zambia is open to international trade in limes without any restrictions, it will import Suppose the Zambian government wants to reduce imports to exactly 100 tons of limes to help domestic producers. A tariff of achieve this. A tariff set at this level would raise S in revenue for the Zambian government. tons of limes.

PRICE (Dollars per ton) 1085 1030 975 920 865 810 755 0 50 100 150 W 200 250 300 350 400 450 500 QUANTITY (Tons of limes). If Zambia is open to international trade in limes without any restrictions, it will import Suppose the Zambian government wants to reduce imports to exactly 100 tons of limes to help domestic producers. A tariff of achieve this. A tariff set at this level would raise S in revenue for the Zambian government. tons of limes.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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