The world price of oranges is $15 per bushel. The domestic supply of oranges is 100 + 2(P) and the domestic demand for oranges is 500 – 5(P). Assume for now that this is a small nation that is not able to affect the world market.  How would a tariff of $10 per bushel affect this nation? (Consider gains and losses)

Refer to the diagram below, where Sd and Dd are the domestic supply and demand for a product, Pt is the domestic price with a tariff, and Pc is the world price of that product. Open this image in a program or approximate this drawing on paper and color in the area that represents gains from trade if no trade barriers exist.

Would the U.S. government gain any advantage from using tariffs or quotas to restrict imports?

Based on the information from the previous graph, absent international trade total surplus is $ The following graph shows the same domestic supply and demand curves for melons in Bangladesh. Now, suppose that the Bangladeshi government changes its stance on international trade, deciding to allow free trade in melons. The horizontal black line (Pw) represents the world price of melons at $500 per ton. Assume that Bangladesh's entry into the world market for melons has no effect on the world price and there are no transportation or transaction costs associated with international trade in melons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triangle (diamond-symbol) to shade in the area representing producer surplus. PRICE (Dollars per ton) 660 Domestic Demand Domestic Supply 620 580 540…