Please answer Q4. Appreciate it.

Please answer Q4. Appreciate it.

Please answer Q4. Appreciate it.

Question 4 (3 points) Assume Baldia from question 3 above is a small country. (a) With the help of a graph, show the effect of the same $0.5 specific tariff. (b) How would you describe the tariff in this case and what impact has it on the volume of trade? Question 3 (15 Points) The nation of Baldia's demand and supply curve for corn is: D = 1000 200P and S = -200 + 200P. Its trading partner Frankia has a demand and supply curve given by: Di= 1000 - 200P and S= 200 + 200P. (a) Derive Baldia's import demand curve (MD) and find the equilibrium price and quantity of corn in the absence of trade? (b) Derive Frankia's export supply curve (XS) and find the price and quantity of corn in autarky? (c) Now, find the equilibrium under free trade. What is the world price? What is the volume of trade? (d) Baldia imposes a specific tariff of $0.5 on corn imports. Calculate and show graphically the following effects: i. ii. iii. iv. Consumer surplus Producer surplus The efficiency loss The terms of trade gain The total effect on welfare of the tariff. V. Question 4 (3 points) Assume Baldia from question 3 above is a small country. (a) With the help of a graph, show the effect of the same $0.5 specific tariff. (b) How would you describe the tariff in this case and what impact has it on the volume of trade? Question 3 (15 Points) The nation of Baldia's demand and supply curve for corn is: D = 1000 200P and S = -200 + 200P. Its trading partner Frankia has a demand and supply curve given by: Di= 1000 - 200P and S= 200 + 200P. (a) Derive Baldia's import demand curve (MD) and find the equilibrium price and quantity of corn in the absence of trade? (b) Derive Frankia's export supply curve (XS) and find the price and quantity of corn in autarky? (c) Now, find the equilibrium under free trade. What is the world price? What is the volume of trade? (d) Baldia imposes a specific tariff of $0.5 on corn imports. Calculate and show graphically the following effects: i. ii. iii. iv. Consumer surplus Producer surplus The efficiency loss The terms of trade gain The total effect on welfare of the tariff. V