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4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of maize in Bangladesh. The world price (Pu?) of maize is $255 per ton and is displayed as a horizontal black line. 111roughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. (9 495 Domestic Demand Domestic Supply 455 435 405 3?5 345 315 PRICE (Dollars perton) 285 255 225 195 I} so on 90120150130 210 240 2rd 30o QUANTITY {Tons of maize] If Bangladesh is open to international trade in maize without any restrictions, it will import tons of maize. Suppose the Bangladeshi government wants to reduce imports to exactly 60 tons of maize to help domestic producers. A tariff of $ per ton will achieve this. A tariff set at this level would raise $ in revenue for the Bangladeshi government.A tariff set at this level would raise 5360 X in revenue for the Bangladeshi government. Points: 0 f 1 Explanation: Close Explanation A A $60-pertpn tariff on maize would cause Bangladesh to import 60 tons of maize. Therefore, you can compute the amount of tax revenue this tariff will generate in the following way: Tax Revenue = PerUnit Tariff x Quantity Imported = $50 per ton x 60 tons = $3,500