5. Effects of a tariff on international tradeThe following graph shows the domestic supply of and demand for soybeans in Guatemala. Guatemala is open to international trade of soybeanswithout any restrictions. The world price (Pw) of soybeans is $525 per ton and is represented by the horizontal black line. Throughout this problem,assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transactioncosts associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible beforeany exporting or importing takes place.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.PRICE (Dollars per ton)8408057707357006656305955605254901Supply+DemandPW0 50 100 150 200 250 300 350 400 450 500QUANTITY (Thousands of tons of soybeans)Graph Input ToolMarket for Soybeans in GuatemalaPrice(Dollars per ton)Domestic Demand(Thousands of tonsof soybeans)770100Domestic Supply(Thousands of tonsof soybeans)400 If Guatemala is open to international trade of soybeans without any restrictions, it will importenter the full value for your answer, accounting for the horizontal axis units.)Suppose the Guatemalan government wants to reduce imports to exactly 200,000 tons of soybeans to help domestic producers. A tariff of $per ton will achieve this.A tariff set at this level would raise $tons of soybeans. (Note: Be sure toin revenue for the Guatemalan government.

The following graph shows the domestic supply of and demand for soybeans in Guatemala. Guatemala is open to international trade of soybeans without any restrictions. The world price (Pw) of soybeans is $525 per ton and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. 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 supply of and demand for soybeans in Guatemala. Guatemala is open to international trade of soybeans without any restrictions. The world price (Pw) of soybeans is $525 per ton and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. 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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Lesson 12 Question 4
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