490 Domestic Demand Domestic Supply 460 World Price Plus Tariff 430 400 370 CS 340 310 PS 280 W 250 Government Revenue 220 190 5 10 15 20 25 30 35 40 45 50 DWL QUANTITY (Thousands of tons of wheat)...

Extracted text: 490 Domestic Demand Domestic Supply 460 World Price Plus Tariff 430 400 370 CS 340 310 PS 280 W 250 Government Revenue 220 190 5 10 15 20 25 30 35 40 45 50 DWL QUANTITY (Thousands of tons of wheat) Complete the following table to summarize your results from the previous two graphs. Under Free Trade Under a Tariff (Dollars) (Dollars) Consumer Surplus Producer Surplus Government Revenue Based on your analysis, as a result of the tariff, Kenya's consumer surplus by $ producer surplus by $ , and the government collects in revenue. Therefore, the net welfare effect is a of PRICE (Dollars per ton)


Extracted text: 4. Tariffs Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw =$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 490 Domestic Demand Domestic Supply 460 CS 430 400 370 PS 340 310 280 250 220 190 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons of wheat) If Kenya allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is $ and Kenya will import tons of wheat. Show the effects of the $60 tariff on the following graph. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green triangle (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan triangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton)