(Solved): 6. Effects of a tariff in a small nation Suppose New Zealand is open to free trade in the world mar ...

6. Effects of a tariff in a small nation Suppose New Zealand is open to free trade in the world market for wheat. Because of New Zealand's small size, the demand for and supply of wheat in New Zealand do not affect the world price. The following graph shows the domestic wheat market in New Zealand. The world price of wheat is \( P_{W}=\$ 250 \) per ton. Throughout this problem, assume that changes in trade policies in other nations do not signdicantly affect the world market for wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also assume that domestic suppies will satisfy domestic demand as much as possable before any exporting or importing takes place. On the following graph, wse the green triangle (trangle symbols) to shade the area representing constumer surplus (CS) when the economy is at the free-trade equilibrim. Then, use the purple triangle (diamond symbols) to shade the area ropresenting domestic producer surplus (Ps). On the following graph, use the green triangle (trangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equibbrium. Then, use the purple triangle (diamond symbols) to shade the ama representing domestic producer surplus (ps) If New Zealand allows international trade in the market for wheat, it will import tons of wheat. (Note: Be sure to enter the full value for your answer, accounting for the horuontal axs unis.) If New Zealand allows international trade in the market for wheat, it will import tons of wheat. (Note: Be sure to enter the full value for: your answer, accounting for the horizontal axas units.) Now suppose the New Zealand government decides to impose a tariff of 560 on each imported ton of wheat. After the torif, the dornestic price of a ton of wheat will be , and New Zealand will import tons of wheat. Show the effects of the \( \$ 60 \) tarif on the following 9 raph. Use the grey line (star symbol) to indicate the world price plus the tanif. Then, use the green trangle (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the domestic producer surplus with the tanif, Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan triangles (dash symbals) to Shade the areas representing the net loss or deadweight loss (DWL) caused by the taniff. sthade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. Complete the following table to summanze your results from the previous two graphs Based on your analysis, as a resolt of the tanif, New Zealand's consumer surplus by and producer surplus by Taking into account how much revenue the tanif generates for the government, the net welfare effect is a Complete the following table to summarize your results from the previous two graphs. Based on your analysis, as a result of the tariff, New Zealand's consumer surplus Taking into account how much revenue the tariff generates for the government, the