The graph above shows the demand and supply of socks for the country of Banglade
ID: 1093650 • Letter: T
Question
The graph above shows the demand and supply of socks for the country of Bangladesh. a. If trade is avoided, Bangladesh consumes _____ pairs of socks at a price of _____ per socks. b. With free trade, for a world price of $4 per pair of socks, Bangladesh is producing _____pairs of socks. c. With free trade, for a world price of $4 per pair of socks, Bangladesh is consuming _______ pairs of socks. d. With free trade, for a world price of $4 per pair of socks, Bangladesh is importing _________pairs of socks. e. If the world price is $4 per sock, and the government of Bangladesh imposes a tariff of $1, Bangladesh produces ____________ and imports __________pairs of socks. f. If the world price is $4 per pair of socks, and the government of Bangladesh imposes a tariff of $1, how much tariff revenue will the Bangladesh government collect? _____ .
Explanation / Answer
a 9 pairs of socks at a price of 7.5 per socks
B Bangladesh is producing 4 pairs of socks
c Bangladesh is consuming 15 pairs of socks
D Bangladesh is importing (Supply-demand)=15-4=11 pairs of socks
E If the world price is $4 per sock, and the government of Bangladesh imposes a tariff of $1, Bangladesh produces 5 and imports 13.5-5=8.5 pairs of socks
D revenue will be total demand that is = 13.5
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