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If Panama is open to international trade in lemons without any restrictions, it will import Suppose the Panamanian government wants to reduce imports to exactly 160 tons of lemons to help domestic producers. A tariff of $ will achieve this. A tariff set at this level would raise $ tons of lemons. in revenue for the Panamanian government. per ton

If Panama is open to international trade in lemons without any restrictions, it will import Suppose the Panamanian government wants to reduce imports to exactly 160 tons of lemons to help domestic producers. A tariff of $ will achieve this. A tariff set at this level would raise $ tons of lemons. in revenue for the Panamanian government. per ton

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter34: Globalization And Protectionism
Section: Chapter Questions
Problem 55P: Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply...
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If Panama is open to international trade in lemons without any restrictions, it will import Suppose the Panamanian government wants to reduce imports to exactly 160 tons of lemons to help domestic producers. A tariff of $ will achieve this. A tariff set at this level would raise $ tons of lemons. in revenue for the Panamanian government. per ton
Transcribed Image Text:If Panama is open to international trade in lemons without any restrictions, it will import Suppose the Panamanian government wants to reduce imports to exactly 160 tons of lemons to help domestic producers. A tariff of $ will achieve this. A tariff set at this level would raise $ tons of lemons. in revenue for the Panamanian government. per ton
4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of lemons in Panama. The world price (Pw) of lemons is $270 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 lemons and that there are no transportation or transaction costs associated with international trade in lemons. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Domestic Demand 390 370 X 350 330 310 270 + PRICE (Dollars per ton) 450 430 410 290 250 0 40 80 120 Domestic Supply 160 200 240 280 320 360 QUANTITY (Tons of lemons) Pw 400 (?)
Transcribed Image Text:4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of lemons in Panama. The world price (Pw) of lemons is $270 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 lemons and that there are no transportation or transaction costs associated with international trade in lemons. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Domestic Demand 390 370 X 350 330 310 270 + PRICE (Dollars per ton) 450 430 410 290 250 0 40 80 120 Domestic Supply 160 200 240 280 320 360 QUANTITY (Tons of lemons) Pw 400 (?)
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