Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Zambia. The world price

image text in transcribedimage text in transcribed
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Zambia. The world price (Pw ) of soybeans is $545 per ton and is represented by the horizontal black line. Throughout the question, 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. 815 Domestic De Domestic Supply 785 755 725 695 665 PRICE (Dollars per ton) 635 605 575 PW 545 515 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Tons of soybeans) If Zambia is open to international trade in soybeans without any restrictions, it will import tons of soybeans.Suppose the Zambian government wants to reduce imports to exactly 60 tons of soybeans to help domestic producers. A tariff of per ton will achieve this. A tariff set at this level would raise in revenue for the Zambian government

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Textbook Of Mathematical Economics

Authors: Dr Chandrakant Singh

1st Edition

9353140986, 9789353140984

More Books

Students also viewed these Economics questions