omafservletquiziquiz actiontakeQuiziquiz probGuidONAPCOA8010

om/af/servlet/quiziquiz action-takeQuiz&iquiz; probGuid-ONAPCOA801010000002 probGuid-ONAPCOA801010000002d4060e00700008ctx-tjoseph-002 Aa y of and demand for soybeans in Zambia. Zambia is open to international trade of soybeans assume that domestic suppliers will satisty domestic 3. Restricting imports through tarifls The following calculator shows the domestic supply of and demand for soybeans in Zambia without any restrictions. The world price of soybeans is $250 per tonne and is represented by the question, assume that the amount demanded by any one country does not affect the transportation or transaction costs associated with international trade in demand as much as possible before any exporting or importing takes place. price of soybeans is $250 per tonne and is represented by the horizontal brown line. Throughout the S world price of soybeans and that there are no soybeans. Also Use the calculator to help you complete the following exercises. You will not be scored on any changes you make to the you make to the calculator tip: Use your mouse to drag the green line on the graph. The values in the boxes You can also directly change the value in the box with the white background Calculate, \"the graph and any related values will change accordingly on the right side of the calculator will change accordinghy the box with the white background by clicking in the box and typing. When you click the button labeled Tool tip: Use your mouse to drag the g PRICE IDelars per tennel 1150 Domestic Demand Domestic Supply 24 QUANTITY (Thousands of tonnes of soybeen Given this information, Zambia will import tonnes of soybeans Suppose the Zambian govenment w wants to set a tariff on soybeans that would reduce imports to 8,000 tonnes. Which of the following tanfs would achieve this? O A tariff of $300 per tonne O A taniff of $100 per tonne Home

Solution

(a) At world price of $750, domestic demand = 36 and domestic supply = 4

Shortage = 36 - 4 = 32, which must be imported.

(b) Option (1).

A tariff of $300 will increase domestic price to $550, at which domestic demand = 24,000 and domestic supply = 16,000.

Shortage = Imports = 24,000 - 16,000 = 8,000 which is desired imports.

(c) Tariff revenue = 8,000 x $300 = $2,400,000 = $2,4 million