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2. Welfare effects of a tariff in a small country Suppose Kenya is open to free trade in the world market for wheat. Because of

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2. Welfare effects of a tariff in a small country 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 tonne. 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).460 Domestic Demand Domestic Supply 430 CS 400 PRICE (Dollars per tonne) 370 340 PS 310 280 PW 250 220 190 160 25 75 100 125 150 175 200 225 250 QUANTITY (Tonnes of wheat)If Kenya allows international trade in the market for wheat, it will import tonnes of wheat. Now suppose the Kenyan government decides to impose a tariff of $30 on each imported tonne of wheat. After the tariff, the price Kenyan consumers pay for a tonne of wheat is $ , and Kenya will import tonnes of wheat. Show the effects of the $30 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 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 triangles (dash symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff.460 Domestic Demand Domestic Supply 430 World Price Plus Tariff 400 PRICE (Dollars per tonne) 370 340 CS 310 280 PS PW 250 220 Government Revenue 190 160 25 50 75 100 125 150 175 200 225 250 DWL 0 QUANTITY (Tonnes of wheat)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 0 Based on your analysis, as a result of the tariff, Kenya's consumer surplus by $ , producer surplus by $ and the government collects $ in revenue. Therefore, the net welfare effect is a of $

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