### Analysis of the $40 Tariff on Soybeans#### Graph ExplanationThe graph illustrates the impact of a $40 tariff on soybean imports. It contains the following components:1. **Axes:** - The horizontal axis represents the quantity of soybeans (in tons). - The vertical axis represents the price of soybeans (in dollars per ton).2. **Lines:** - **Domestic Demand (Blue Line):** This downward-sloping line shows the quantity of soybeans demanded at various prices. - **Domestic Supply (Orange Line):** This upward-sloping line shows the quantity of soybeans supplied domestically at various prices. - **World Price Plus Tariff (Black Line with Plus Symbol):** Indicates the world price of soybeans plus the $40 tariff.3. **Areas of Interest:** - **Consumer Surplus (CS - Green Triangles):** Represents the area showing consumer surplus with the tariff. - **Producer Surplus (PS - Purple Diamonds):** Represents the area showing producer surplus with the tariff. - **Government Revenue (Orange Squares):** Shaded area representing the revenue received by the government from the tariff. - **Deadweight Loss (DWL - Tan Rectangles):** Areas representing the economic inefficiency or loss caused by the tariff.#### Table for Comparison of Surplus and Revenue| | Under Free Trade (Dollars) | Under a Tariff (Dollars) ||-------------------------|----------------------------|--------------------------|| **Consumer Surplus** | | || **Producer Surplus** | | || **Government Revenue** | 0 | |#### Analysis SummaryBased on the analysis:- The consumer surplus decreases by \$____.- The producer surplus increases by \$____.- The government collects \$____ in revenue.**Net Welfare Effect:**The net welfare effect is a loss of \$____, reflecting the deadweight loss due to the tariff.

Tariff refers to the tax imposed by the government on the imported goods in order to restrict the…

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 quadnilateral (square symbols) to shade the area representing government revenue received from the taniff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the taniff. Domestic Demand Domestic Supply 680 640 World Price Plus Tariff 600 560 520 cs 480 440 PS 400 360 Government Revenue 320 280 0 15 30 45 60 75 90 106 120 135 150 DWL QUANTITY (Tons of soybeans) 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, Zambia's consumer surplus by s producer surplus v by s and the government collects S in revenue. Therefore, the net welfare effect is a v of PRICE (Dollars per ton) (2)

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 quadnilateral (square symbols) to shade the area representing government revenue received from the taniff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the taniff. Domestic Demand Domestic Supply 680 640 World Price Plus Tariff 600 560 520 cs 480 440 PS 400 360 Government Revenue 320 280 0 15 30 45 60 75 90 106 120 135 150 DWL QUANTITY (Tons of soybeans) 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, Zambia's consumer surplus by s producer surplus v by s and the government collects S in revenue. Therefore, the net welfare effect is a v of PRICE (Dollars per ton) (2)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Lesson 12 Question 4
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Finland imports shoes into its country; they are a price taker in this market. Suppose the world price of shoes is $40. If Finland imposes a $10 tariff on shoes, what would be the domestic price of shoes and what will happen to the quantity bought? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. The quantity bought will increase and the price will be $30. a The quantity bought will fall and the price will be $30. The quantity bought will fall and the price will be $50. The quantity bought will increase and the price will be $50.
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Economics Question
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