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The following graph shows the domestic supply of and demand for wheat in Bolivia. Bolivia is open to international trade of wheat without any estrictions. The world price (Pw) of wheat is $260 per bushel and is represented by the horizontal black line. Throughout this problem, assume th the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associa with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or mporting takes place. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.

The following graph shows the domestic supply of and demand for wheat in Bolivia. Bolivia is open to international trade of wheat without any estrictions. The world price (Pw) of wheat is $260 per bushel and is represented by the horizontal black line. Throughout this problem, assume th the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associa with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or mporting takes place. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.

Principles of Economics, 7th Edition (MindTap Course List)
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 1PA
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The following graph shows the domestic supply of and demand for wheat in Bolivia. Bolivia is open to international trade of wheat without any restrictions. The world price (Pw) of wheat is $260 per bushel and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associat with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Wheat in Bolivia 530 I Price (Dollars per bushal) 500 Supply 470 470 Domestic Demand (Thousands of bushels of wheat) Domestic Supply (Thousands of bushels of wheat) 100 400 440 410 380 350 320 Demand 290 Pw 260 230 50 100 150 200 250 300 350 400 450 500 QUANTITY (Thousands of bushels of wheat) If Bolivia is open to international trade of wheat without any restrictions, it will import bushels of wheat. (Note: Be sure to enter the full value for your answer, accounting for the horizontal axis units.) Suppose the Bolivian government wants to reduce imports to exactly 100,000 bushels of wheat to help domestic producers. A tariff of S per bushel will achieve this. A tariff set at this level would raise in revenue for the Bolivian government. PRICE (Dollars per bushel)
Transcribed Image Text:The following graph shows the domestic supply of and demand for wheat in Bolivia. Bolivia is open to international trade of wheat without any restrictions. The world price (Pw) of wheat is $260 per bushel and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associat with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Wheat in Bolivia 530 I Price (Dollars per bushal) 500 Supply 470 470 Domestic Demand (Thousands of bushels of wheat) Domestic Supply (Thousands of bushels of wheat) 100 400 440 410 380 350 320 Demand 290 Pw 260 230 50 100 150 200 250 300 350 400 450 500 QUANTITY (Thousands of bushels of wheat) If Bolivia is open to international trade of wheat without any restrictions, it will import bushels of wheat. (Note: Be sure to enter the full value for your answer, accounting for the horizontal axis units.) Suppose the Bolivian government wants to reduce imports to exactly 100,000 bushels of wheat to help domestic producers. A tariff of S per bushel will achieve this. A tariff set at this level would raise in revenue for the Bolivian government. PRICE (Dollars per bushel)
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