4 Effects Of A Tariff On International Trade The Following Graph Shows The Domestic Supply Of And Demand For Oranges In 1 (36.69 KiB) Viewed 42 times
4 Effects Of A Tariff On International Trade The Following Graph Shows The Domestic Supply Of And Demand For Oranges In 2 (18.19 KiB) Viewed 42 times
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for oranges in Guatemala. The world price (Pw) of oranges is $800 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 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. ? 1120 Domestic Demand Domestic Supply 1080 1040 1000 960 920 880 840 800 760 720 PRICE (Dollars per ton) 0 20 40 60 80 100 120 140 QUANTITY (Tons of oranges) PW 160 180 200
If Guatemala is open to international trade in oranges without any restrictions, it will import tons of oranges. Suppose the Guatemalan government wants to reduce imports to exactly 80 tons of oranges to help domestic producers. A tariff of s will achieve this.. A tariff set at this level would raise $ in revenue for the Guatemalan government. Grade It Now per ton Save & Continue Continue without saving
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