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I I u 4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Zambia.

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I I u 4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Zambia. The world price (PW) of oranges is $525 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 anv one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. . an Domestic Demand Domestic Supply 63 PRlCE (Dollars per ton) owaarzoioozooztozaoazoamwo QUANTITY (Tons oi oranges) If Zambia is open to international trade in oranges without any restrictions. it will import tons of oranges. Suppose the Zambian government wants to reduce imports to exactly 160 tons of oranges to help domestic producers. Atariff of per ton will amieve this. A tanlf set at this level would raise S in revenue for the Zambian government

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