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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 triangle (triangle symbols) to show the consumers' surplus with the tariff and the purple triangle (diamond symbols) to show the producers' 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 triangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 530 490 450 410 $ 370 330 290 250 210 170 130 0 Domestic Demand 12 16 20 24 QUANTITY (Thousands of tons of wheat) 48 Consumers' Surplus Producers' Surplus Government Revenue Domestic Supply I government collects $ 28 32 36 P 0 W 40 World Price Plus Tariff Complete the following table to summarize your results from the previous two graphs. Under Free Trade (Dollars) 19,200 1,200 CS PS Government Revenue DWL Under a Tariff (Dollars) Y Based on your analysis, as a result of the tariff, Kenya's consumers' surplus $ producers' surplus by $ , and the in revenue. Therefore, the net welfare effect is a 10,800 4,800 2,400 ▼ by of

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 triangle (triangle symbols) to show the consumers' surplus with the tariff and the purple triangle (diamond symbols) to show the producers' 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 triangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 530 490 450 410 $ 370 330 290 250 210 170 130 0 Domestic Demand 12 16 20 24 QUANTITY (Thousands of tons of wheat) 48 Consumers' Surplus Producers' Surplus Government Revenue Domestic Supply I government collects $ 28 32 36 P 0 W 40 World Price Plus Tariff Complete the following table to summarize your results from the previous two graphs. Under Free Trade (Dollars) 19,200 1,200 CS PS Government Revenue DWL Under a Tariff (Dollars) Y Based on your analysis, as a result of the tariff, Kenya's consumers' surplus $ producers' surplus by $ , and the in revenue. Therefore, the net welfare effect is a 10,800 4,800 2,400 ▼ by of

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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 triangle (triangle symbols) to show the consumers' surplus with the tariff and the purple triangle (diamond symbols) to show the producers' 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 triangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 530 490 450 410 $ 370 330 290 250 210 170 130 Domestic Demand 0 4 8 12 16 20 24 QUANTITY (Thousands of tons of wheat) Consumers' Surplus Producers' Surplus Government Revenue Domestic Supply I government collects $ 28 32 36 P 0 W 40 +- 19,200 1,200 World Price Plus Tariff CS Complete the following table to summarize your results from the previous two graphs. Under Free Trade (Dollars) PS Goverment Revenue DWL ? Under a Tariff (Dollars) Based on your analysis, as a result of the tariff, Kenya's consumers' surplus $ producers' surplus by $ and the t in revenue. Therefore, the net welfare effect is a 10,800 4,800 2,400 by of
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 triangle (triangle symbols) to show the consumers' surplus with the tariff and the purple triangle (diamond symbols) to show the producers' 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 triangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 530 490 450 410 $ 370 330 290 250 210 170 130 Domestic Demand 0 4 8 12 16 20 24 QUANTITY (Thousands of tons of wheat) Consumers' Surplus Producers' Surplus Government Revenue Domestic Supply I government collects $ 28 32 36 P 0 W 40 +- 19,200 1,200 World Price Plus Tariff CS Complete the following table to summarize your results from the previous two graphs. Under Free Trade (Dollars) PS Goverment Revenue DWL ? Under a Tariff (Dollars) Based on your analysis, as a result of the tariff, Kenya's consumers' surplus $ producers' surplus by $ and the t in revenue. Therefore, the net welfare effect is a 10,800 4,800 2,400 by of
Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw=$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer's surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producers' surplus (PS). PRICE (Dollars per ton) 530 Domestic Demand 490 450 410 370 330 290 250 210 170 130 0 Domestic Supply 4 8 12 16 20 24 QUANTITY (Thousands of tons of wheat) P 28 32 36 40 CS PS Ⓡ If Kenya allows international trade in the market for wheat, it will import wheat. Now suppose the Kenyan government decides to impose a tariff of $40 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is Kenya will import 40,000 tons of wheat. $310, and Show the effects of the $40 tariff on the following graph. 12,000 tons of Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green triangle (triangle symbols) to show the consumers' surplus with the tariff and the purple triangle (diamond symbols) to show the producers' 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 triangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. (2)
Transcribed Image Text:Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw=$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer's surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producers' surplus (PS). PRICE (Dollars per ton) 530 Domestic Demand 490 450 410 370 330 290 250 210 170 130 0 Domestic Supply 4 8 12 16 20 24 QUANTITY (Thousands of tons of wheat) P 28 32 36 40 CS PS Ⓡ If Kenya allows international trade in the market for wheat, it will import wheat. Now suppose the Kenyan government decides to impose a tariff of $40 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is Kenya will import 40,000 tons of wheat. $310, and Show the effects of the $40 tariff on the following graph. 12,000 tons of Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green triangle (triangle symbols) to show the consumers' surplus with the tariff and the purple triangle (diamond symbols) to show the producers' 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 triangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. (2)
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