Now suppose the Jordanian government decides to impose a tariff of $120 on each imported ton of maize. Under the tariff, the price Jordanian consumers pay for a ton of maize becomes $ and Jordan will import tons of maize. Use the following graph to show the effects of the $120 tariff. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (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 points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 1280 1220 1160 1100 1040 980 920 860 800 740 680 0 Domestic Demand 25 50 Domestic Supply 75 100 125 150 175 QUANTITY (Tons of maize) 200 PW 225 250 World Price Plus Tariff CS 842 PS **/** Government Revenue. DWL ?

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Chapter21: International Trade
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Now suppose the Jordanian government decides to impose a tariff of $120 on each imported ton of maize. Under the tariff, the price Jordanian
consumers pay for a ton of maize becomes $
and Jordan will import
tons of maize.
Use the following graph to show the effects of the $120 tariff.
Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (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 points (rectangle symbols) to shade the areas
representing deadweight loss (DWL) caused by the tariff.
PRICE (Dollars per ton)
1280
1220
1160
1100
1040
980
920
860
800
740
680
0
Domestic Demand
25
"
50
Domestic Supply
75 100 125 150 175
QUANTITY (Tons of maize)
200 225
PW
250
-+
World Price Plus Tariff
CS
PS
Government Revenue
DWL
?
Transcribed Image Text:Now suppose the Jordanian government decides to impose a tariff of $120 on each imported ton of maize. Under the tariff, the price Jordanian consumers pay for a ton of maize becomes $ and Jordan will import tons of maize. Use the following graph to show the effects of the $120 tariff. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (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 points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 1280 1220 1160 1100 1040 980 920 860 800 740 680 0 Domestic Demand 25 " 50 Domestic Supply 75 100 125 150 175 QUANTITY (Tons of maize) 200 225 PW 250 -+ World Price Plus Tariff CS PS Government Revenue DWL ?
PRICE (Dollars per to
1040
980
920
$
860
800
740
680
0
25 50
75 100 125 150 175 200 225 250
QUANTITY (Tons of maize)
Consumer Surplus
Producer Surplus
Government Revenue
With Free Trade
(Dollars)
PW
0
Complete the following table to summarize your results from the previous two graphs.
With a Tariff
(Dollars)
Based on your analysis, as a result of the tariff, Jordan's consumer surplus
by $
and the government collects $
1
CS
PS
Government Revenue
DWL
by $
producer surplus
in revenue. Therefore, the net welfare effect is a
I
of
Transcribed Image Text:PRICE (Dollars per to 1040 980 920 $ 860 800 740 680 0 25 50 75 100 125 150 175 200 225 250 QUANTITY (Tons of maize) Consumer Surplus Producer Surplus Government Revenue With Free Trade (Dollars) PW 0 Complete the following table to summarize your results from the previous two graphs. With a Tariff (Dollars) Based on your analysis, as a result of the tariff, Jordan's consumer surplus by $ and the government collects $ 1 CS PS Government Revenue DWL by $ producer surplus in revenue. Therefore, the net welfare effect is a I of
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