3. Home imposes a specific tariff of 0.5 on wheat imports.

a. Determine and graph the effects of the tariff on the following: (1) the price of

wheat in each country; (2) the quantity of wheat supplied and demanded in each

country; (3) the volume of trade.

b. Determine the effect of the tariff on the welfare of each of the following groups:

(1) Home import-competing producers; (2) Home consumers; (3) the Home

government.

c. Show graphically and calculate the terms of trade gain, the efficiency loss, and the

total effect on welfare of the tariff.