Question

If Bangladesh is open to international trade in wheat without any restrictions, it will import bushels of wheat. Suppose the Bangladeshi government wants to reduce imports to exactly 160 bushels of wheat to help domestic producers. A tariff of $ per bushel will achieve this. A tariff set at this level would raise $ in revenue for the Bangladeshi government.

Answer 1

Answer:

A tariff set at that level will raise 9600 in revenue.

Explanation:

Bangladesh is open to international trade, it will import 360-40 = 320 bushels of wheat.

*At this point please, kindly go through the attached file to study the graph and to understand the answers better.*

Then When it wants to reduce imports by exactly 80 bushels so a tariff of 315-255 =60 per bushel will achieve this.

A tariff set at this level would raise 60 X 1600 = 9600 in revenue.