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Show the effects of the $40 tariff on the following graph. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. Domestic Demand Domestic Supply 710 670 World Price Plus Tariff 630 590 550 cs 510 470 PS 430 390 P. Government Revenue 350 310 O 15 30 60 75 90 105 120 135 150 45 DWL QUANTITY (Tons of maize) Complete the following table to summarize your results from the previous two graphs. . Under Free Trade Under a Tariff (Dollars) (Dollars) Consumer Surplus Producer Surplus Government Revenue by S in revenue. Therefore, the net welfare effect is a v of Based on your analysis, as a result of the tariff, Sudan's consumer surplus producer surplus v by S , and the government collects ($ PRICE (Dollars per ton)

Show the effects of the $40 tariff on the following graph. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. Domestic Demand Domestic Supply 710 670 World Price Plus Tariff 630 590 550 cs 510 470 PS 430 390 P. Government Revenue 350 310 O 15 30 60 75 90 105 120 135 150 45 DWL QUANTITY (Tons of maize) Complete the following table to summarize your results from the previous two graphs. . Under Free Trade Under a Tariff (Dollars) (Dollars) Consumer Surplus Producer Surplus Government Revenue by S in revenue. Therefore, the net welfare effect is a v of Based on your analysis, as a result of the tariff, Sudan's consumer surplus producer surplus v by S , and the government collects ($ PRICE (Dollars per ton)

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
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Show the effects of the $40 tariff on the following graph. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. (?) 710 Domestic Demand Domestic Supply 670 World Price Plus Tariff 630 590 550 cs 510 470 PS 430 390 Government Revenue Pw 350 310 15 30 45 60 75 105 120 135 150 DWL 06 QUANTITY (Tons of maize) Complete the following table to summarize your results from the previous two graphs. Under Free Trade Under a Tariff (Dollars) (Dollars) Consumer Surplus Producer Surplus Government Revenue Based on your analysis, as a result of the tariff, Sudan's consumer surplus by| producer surplus by $ , and the government collects ($ in revenue. Therefore, the net welfare effect is a v of PRICE (Dollars per ton)
Transcribed Image Text:Show the effects of the $40 tariff on the following graph. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. (?) 710 Domestic Demand Domestic Supply 670 World Price Plus Tariff 630 590 550 cs 510 470 PS 430 390 Government Revenue Pw 350 310 15 30 45 60 75 105 120 135 150 DWL 06 QUANTITY (Tons of maize) Complete the following table to summarize your results from the previous two graphs. Under Free Trade Under a Tariff (Dollars) (Dollars) Consumer Surplus Producer Surplus Government Revenue Based on your analysis, as a result of the tariff, Sudan's consumer surplus by| producer surplus by $ , and the government collects ($ in revenue. Therefore, the net welfare effect is a v of PRICE (Dollars per ton)
3. Welfare effects of a tariff in a small country Suppose Sudan is open to free trade in the world market for maize. Because of Sudan's small size, the demand for and supply of maize in Sudan do not affect the world price. The following graph shows the domestic maize market in Sudan. The world price of maize is Pw = $350 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 the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 710 Domestic Demand Domestic Supply 670 CS 630 590 550 PS 510 470 430 390 P. W 350 310 15 30 45 60 75 90 105 120 135 150 QUANTITY (Tons of maize) If Sudan allows international trade in the market for maize, it will import tons of maize. Now suppose the Sudanese government decides to impose a tariff of $40 on each imported ton of maize. After the tariff, the price Sudanese consumers pay for a ton of maize is $ and Sudan will import tons of maize. PRICE (Dollars per ton)
Transcribed Image Text:3. Welfare effects of a tariff in a small country Suppose Sudan is open to free trade in the world market for maize. Because of Sudan's small size, the demand for and supply of maize in Sudan do not affect the world price. The following graph shows the domestic maize market in Sudan. The world price of maize is Pw = $350 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 the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 710 Domestic Demand Domestic Supply 670 CS 630 590 550 PS 510 470 430 390 P. W 350 310 15 30 45 60 75 90 105 120 135 150 QUANTITY (Tons of maize) If Sudan allows international trade in the market for maize, it will import tons of maize. Now suppose the Sudanese government decides to impose a tariff of $40 on each imported ton of maize. After the tariff, the price Sudanese consumers pay for a ton of maize is $ and Sudan will import tons of maize. PRICE (Dollars per ton)
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