Question

The following graph shows the domestic supply of and demand for oranges in Jordan. The world price (Pw) of oranges is $800 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 1200 Domestic Demand Domestic Supply 1150 PRICE (Dollars per ton) 700 A 0 + 20 40 + + + 60 80 100 120 140 QUANTITY (Tons of oranges) 160 180 200 If Jordan is open to international trade in oranges without any restrictions, it will import tons of oranges. per ton Suppose the Jordanian government wants to reduce imports to exactly 80 tons of oranges to help domestic producers. A tariff of $ will achieve this. A tariff set at this level would raise $ in revenue for the Jordanian government.

Answer 1

Am) withaub any 9rus hichanss it adll impelt upto paint A 6raw ferigun mankit price 700 iS Laueen Nhom price So, impat 160- 40)tanns eaniei'brium Pw of oranges. 40 120 tom 120 160 tg A toni f imparxad to e dnes mpart to exoutly tans caf Orenngs t 700-t00) 4100 pn ton, ettt oreh A tariff Ref at this luul wauld gralse aTaunnmunt Sre vem 9re venm 3 4000 So, 120-P0) X(a00-800) 40X100 17