4. Effects of a tariff on international tradeThe following graph shows the domestic demand for and supply of maize in Bolivia. The world price (Pw) of maize is $240 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 maize and that there are no transportation or transaction costs associated with international trade in maize.Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.PRICE (Dollars per ton)440415390365340315290265240215190Domestic Demand0 10 20Domestic Supply30 40 50 60 70QUANTITY (Tons of maize)80 90 100 PRICE (Dollars per ton)4404153903653403152902652402151900Domestic Demand10 20Domestic Supply30 40 50 60QUANTITY (Tons of maize).80 90 100If Bolivia is open to international trade in maize without any restrictions, it will importA tariff set at this level would raise $Suppose the Bolivian government wants to reduce imports to exactly 40 tons of maize to help domestic producers. A tariff of Sachieve this.tons of maize.in revenue for the Bolivian government.per ton will

International trade refers to the exchange of goods, services, human capital, and technology across…

The following graph shows the domestic demand for and supply of maize in Bolivia. The world price (Pw) of maize is $240 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.

The following graph shows the domestic demand for and supply of maize in Bolivia. The world price (Pw) of maize is $240 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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