Exhibit 17.4

-Refer to Exhibit 17.4, which shows the market for wheat for the country of Palatino. S^D is the domestic supply of wheat, and D^D is the domestic demand for wheat. Suppose the world price of wheat is $9 per bushel of wheat and a specific tariff of $6 is imposed on each bushel of wheat imported. Government revenue from the tariff equals _____

Question

Exhibit 17.4

-Refer to Exhibit 17.4, which shows the market for wheat for the country of Palatino. S^D is the domestic supply of wheat, and D^D is the domestic demand for wheat. Suppose the world price of wheat is $9 per bushel of wheat and a specific tariff of $6 is imposed on each bushel of wheat imported. Government revenue from the tariff equals _____

Quizplus · Accepted Answer

The government revenue from the tariff is calculated by multiplying the quantity of wheat imported by the tariff per bushel. Since the world price is $9 and the tariff is $6, the price after the tariff is $15. The quantity imported is the difference between the quantity demanded and the quantity supplied at this price. Without the specific numbers from Exhibit 17.4, we can't calculate the exact quantity, but the correct answer is based on the information given in the question.

Exhibit 17.4 -Refer to Exhibit 17.4, Which Shows the Market for Wheat