The following graph shows the domestic demand for and supply of lemons in Bangladesh. The world price (Pw) of lemons is $245 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. PRICE (Dollars per ton) 405 385 365 345 325 305 285 265 245 225 205 Domestic Demand 0 20 ++ I I I 40 Domestic Supply 60 80 100 120 140 QUANTITY (Tons of lemons) PW A tariff set at this level would raise $ 160 180 200 (?) If Bangladesh is open to international trade in lemons without any restrictions, it will import Suppose the Bangladeshi government wants to reduce imports to exactly 80 tons of lemons to help domestic producers. A tariff of will achieve this. 160 tons of lemons. in revenue for the Bangladeshi government. per ton

The following graph shows the domestic demand for and supply of lemons in Bangladesh. The world price (Pw) of lemons is $245 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. PRICE (Dollars per ton) 405 385 365 345 325 305 285 265 245 225 205 Domestic Demand 0 20 ++ I I I 40 Domestic Supply 60 80 100 120 140 QUANTITY (Tons of lemons) PW A tariff set at this level would raise $ 160 180 200 (?) If Bangladesh is open to international trade in lemons without any restrictions, it will import Suppose the Bangladeshi government wants to reduce imports to exactly 80 tons of lemons to help domestic producers. A tariff of will achieve this. 160 tons of lemons. in revenue for the Bangladeshi government. per ton

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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