hntp/ing MindTap Aplia Homework nbld-33 1376 01721464 Attempts Do No Harm: 13 4.
ID: 1226482 • Letter: H
Question
hntp/ing MindTap Aplia Homework nbld-33 1376 01721464 Attempts Do No Harm: 13 4. Effects of a tariff on international trade The following graph shows the domestbic supply of and demend for maize in Sudan. The world price (Pw) of maze is $260 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by amy one country does not affect the world price of maice and that there are no transportation or transaction costs associated with international trade in maize, Albo, asoume that domestic sappiers will satisfy domestic demand as much as possible before any exporting or imperting takes place Use the graph inout tool to help you answer the following questions. You wll not be graded on any changes you make to his graph Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey erter a value n a white field, the graph and any corresponding annou in each grey field wil change eccordngly, Graph Input Tool Market for Maize in Sudan Price 200 DomestieExplanation / Answer
1. Since market price is $260 , at this price
Quantity demanded = 400,000
Domestic Supply = 100,000
Quantity Imported = 400,000 - 100,000 = 300,000 .
2. To decrease the quantity imported to 100,000
the Quantity demanded = 300,000
and Domestic supply = 200,000
which happens when price = $320
So, Tariff = $320 - 260 = $60 .
C. Tax Revenue = Tariff*Quantity Imported = $60*100,000 = $6,000,000
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