The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2

-In Figure 21.2, if the world price of wheat is $25 and a $10 tariff is imposed:

Question

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2
 
-In Figure 21.2, if the world price of wheat is $25 and a $10 tariff is imposed:

Quizplus · Accepted Answer

When a tariff is imposed, it increases the cost of imported goods. In this case, a $10 tariff on wheat increases the price from the world price of $25, making imports less attractive. This typically leads to a decrease in the quantity of imports, as domestic buyers will either buy less wheat overall or switch to domestically produced wheat if it becomes relatively cheaper. Therefore, the correct answer is that imports will decrease from 300 to 200 bushels of wheat.

The Figure Given Below Depicts the Negatively Sloped Demand and Positively