Answer to Question #29861 in Other Economics for Jessica
I was wondering if I could get help with an economics question. We are given two countries, one a wheat importer and the other a wheat exporter. We have to draw a demand and supply figure that depicts the international market for wheat from the numbers that we are given. We are given: price: 1,2,3,4,5,6,7,8,9 import demand: 8,7,6,5,4,3,2,1,0 and export supply: 0,1,2,3,4,5,6,7,8. Each import demand/export supply number lines up correspondingly with the prices again. We have to determine the world price of wheat if there is free trade between these countries, which we have found to be $5, as this is when import demand and export supply are equal. We now have the question: If the country that imports wheat imposes a tariff of $2 per tonne, what is the world price of wheat and what quantity gets traded internationally? What is the price of wheat in the importing country? Calculate the tariff revenue.
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