1. The corresponding graphs show the supply and demand for strawberries in two c
ID: 1173044 • Letter: 1
Question
1.
The corresponding graphs show the supply and demand for strawberries in two countries: Berryland and Fruitland. Use the information in the graphs to answer the questions. Which of the following groups would benefit from free trade in strawberries between the two countries? Choose all that apply. How would the price of strawberries in Berryland, as compared to free trade prices, be affected if it introduces a $0.50 tariff on imports from Fruitland? What quantity of strawberries would be demanded for Fruitland with the $0..50 Berryland tariff on imports?Explanation / Answer
In absence of free trade the price of strawberries is 0.8 in Berryland and 0.4 in Fruitland.Since due to free trade the price of strawberries would become 0.6.
1)So the groups that would benefit from free trade are
2)If a import tarrif of $0.50 is imposed on imports from Fruitland then Price of Strawberries in Berryland would increase.
3)If the import tarrif is imposed then there would be no imports from Fruitland and as a result the quantity of strawberries demanded in Fruitland would be 80.
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