PRICE (Dollars per ton) The following graph shows the domestic demand for and supply of oranges in Venezuela. The world price (Pw) of oranges is $545 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 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. 905 Domestic Demand Domestic Supply 865 825 785 745 705 665 625 585 545 ☑ 505 0 30 60 90 W 120 150 180 210 240 270 300 QUANTITY (Tons of oranges) Because New Zealand participates in international trade in the market for maize, it will import tons of maize. Now suppose the New Zealand government decides to impose a tariff of $120 on each imported ton of maize. Under the tariff, the price New Zealand consumers pay for a ton of maize becomes $ , and New Zealand will import tons of maize. Use the following graph to show the effects of the $120 tariff. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff.
PRICE (Dollars per ton) The following graph shows the domestic demand for and supply of oranges in Venezuela. The world price (Pw) of oranges is $545 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 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. 905 Domestic Demand Domestic Supply 865 825 785 745 705 665 625 585 545 ☑ 505 0 30 60 90 W 120 150 180 210 240 270 300 QUANTITY (Tons of oranges) Because New Zealand participates in international trade in the market for maize, it will import tons of maize. Now suppose the New Zealand government decides to impose a tariff of $120 on each imported ton of maize. Under the tariff, the price New Zealand consumers pay for a ton of maize becomes $ , and New Zealand will import tons of maize. Use the following graph to show the effects of the $120 tariff. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:The following graph shows the domestic demand for and supply of oranges in Venezuela. The world price (Pw) of oranges is $545 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 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.
905 Domestic Demand
Domestic Supply
865
825
785
745
☑
705
665
625
585
545
PRICE (Dollars per ton)
505
0 30 60
90
120 150 180 210 240 270 300
QUANTITY (Tons of oranges)
(?)
Because New Zealand participates in international trade in the market for maize, it will import
tons of maize.
Now suppose the New Zealand government decides to impose a tariff of $120 on each imported ton of maize. Under the tariff, the price New Zealand
consumers pay for a ton of maize becomes $
and New Zealand will import
tons of maize.
Use the following graph to show the effects of the $120 tariff.
Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus
with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square
symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas
representing deadweight loss (DWL) caused by the tariff.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education