443
1 point: Graph with “Price” on the vertical axis, “Quantity of Rice” on the horizontal axis, downward-
1 point: Horizontal rest-
1 point: Correct indication of imported quantity
1 point: Correct indication of domestically supplied quantity
1 point: Horizontal rest-
1 point: Shaded area that represents tariff revenue as in the figure
Suppose that cheese is traded in the world market at a price of €3 per pound. Assume that France has no trade barriers and has supply and demand curves for cheese as shown in the graph.