The following graph shows the domestic supply of and demand for soybeans in Honduras. The world price (Pw) of soybeans is $530 per ton and isrepresented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the worldprice of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domesticsuppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.890Domestic DemandDomestic Supply850810770730690650610570Pw53049050100150200250300350400450500QUANTITY (Tons of soybeans)PRICE (Dollars per ton) If Honduras is open to international trade in soybeans without any restrictions, it will importtons of soybeans.Suppose the Honduran government wants to reduce imports to exactly 200 tons of soybeans to help domestic producers. A tariff of sper tonwill achieve this.A tariff set at this level would raise $in revenue for the Honduran government.

In an open economy, consumers and producers have an incentive to gain more from making economic…

Answered: The following graph shows the domestic…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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