Use the graph above to answer the following questions: The graph above shows the

Question

Use the graph above to answer the following questions:

The graph above shows the demand and supply of shirts for the country of Eragos.

a. If trade with other countries is prohibited, the Eragoans are consuming _____ shirts at a price of ______ per shirt. (10pts)

b. With free trade, for a world price of $4 per shirt, the Eragoans are producing ________ shirts. (10pts)

c. With free trade, for a world price of $4 per shirt, the Eragoans are consuming ________ shirts. (10pts)

d. With free trade, for a world price of $4 per shirt, the Eragoans are importing _________ shirts.(10pts)

e. If the world price is $4 per shirt, and the government of Eragos imposes a tariff of $1, the Eragoans are producing ____________ and importing _____________shirts. (10pts)

f. If the world price is $4 per shirt, and the government of Eragos imposes a tariff of $1, how much tariff revenue will the Eragos government collect? ______ (10pts)

Explanation / Answer

a. If trade with other countries is prohibited, the Eragoans are consuming _13____ shirts at a price of __6____ per shirt. (10pts) b. With free trade, for a world price of $4 per shirt, the Eragoans are producing __8______ shirts. (10pts) c. With free trade, for a world price of $4 per shirt, the Eragoans are consuming __18______ shirts. (10pts) d. With free trade, for a world price of $4 per shirt, the Eragoans are importing __10_______ shirts.(10pts) e. If the world price is $4 per shirt, and the government of Eragos imposes a tariff of $1, the Eragoans are producing ___11_________ and importing ____4_________shirts. (10pts) f. If the world price is $4 per shirt, and the government of Eragos imposes a tariff of $1, how much tariff revenue will the Eragos government collect? __4____ (10pts)

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