Question

I really need help figuring out the Tarif amount and thre revenue it would raise for the Government. This is based on a Micro Economics 304 question and I could really use some help with the math. It is a bit to vague for me to figure out on my own, thank you.

P.S. I really need this figured out by 03/21.

Sooy DOMEST20 DED ODMESTIC SUPPLY Price (pollars per Busher 260- - Pu/world Price) 30 60 90 no 159 180 zo 27 9.00 Quantity Bushes of wheat) The graph above shows the domestic supply of and demand for wheat in made upland. The world price lof wheat is 260 per bashel and is represented by the black horizontal line, I need some help with the mouth that follows: Dl Suppose the made upland governmand wants to reduce imports to exactly 120 bushels of wheat to help domestic producers, A tariff of is per bushel will achieve this. . - 24 A tariff set at this level would raise Is in revenue for the made upland government. how much!

Answer 1

500 470 Domestic demand Domestic supply 320 Price(Dollars per bushels) 2904 ----- - - - - - - - - - - - ----PW+t - - - - - PW - - - - - - - - - 2002 30 60 90 120 150 180 210 240 270 300 Quantity (Bushels of wheat) Under free trade price of $260, the domestic demand is 240 bushels and domestic supply is 60 bushels. The net import is equal to 180 bushels (240-60). When Madeupland impose a tariff equal to $30 per bushels the domestic price increase to $290. Then the domestic supply increase from 60 to 90 bushels and domestic demand decrease to 240 to 210. Thus net import is equal to 120 bushels (210-90). The total revenue raised from tariff is $3600($30x120, tariffx import quantity). 1. Answer: Suppose the Madeupland government wants to reduce imports exactly 120 bushels of wheat to help the domestic producers, a tariff of $30 per bushels will achieve this. 2. A tariff set at this level would raise $3600 in revenue for the Madeupland government.