(Solved): tariff in small nation Suppose Honduras is open to free trade in the world market for soybeans. Beca ...

Suppose Honduras is open to free trade in the world market for soybeans. Because of Honduras's small size, the demand for and supply of soybeans in Honduras do not affect the world price. The following graph shows the domestic soybeans market in Honduras. The world price of soybeans is \( P_{W}=\$ 400 \) per ton. Throughout this problem, assume that changes in trade policies in other nations do not significantly affect the world market for soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also assume that domestic supplies Will satisfy domestic demand as much as possible before any exporting or importing takes place. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the ares representing domestic producer surplus (PS). If Honduras allows international trade in the market for soybeans, it will import tons of soybeans. (Note: Be sure to enter the full value for your answer, accounting for the horizontal axis units.) Now suppose the Honduran government decides to impose a tariff of \( \$ 40 \) on each imported ton of soybeans. After the tariff, the domestic price of a ton of soybeans will be , and Honduras will import tons of soybeans: Show the effects of the \( \$ 40 \) tariff on the following graph. Use the grey line (star symbol) to indicate the worid price plus the tariff. Then, use the green triangle (triangle symbols) to show the consumer surplus with the tariff and the purpie triangle (diamond symbols) to show the domestic producer surplus with the tariff. Lastly, uso the orange quadriateral (square symbols) to shade the area representing government revenue received from the tariff and the tan thangles (dash symbols) to shade the areas representing the net loss or deadweight loss (DWL) caused by the tariff. Complete the following table to summarize your results from the previous two graphs. Based on your analysis, as a result of the tariff, Honduras's consumer surplus by and producer surplus by of Taking into account how much revenue the tariff generates for the government, the net welfare effect is a