How does an export tax affect domestic grain prices

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Reference no: EM13222923

china ia a major producer of grains, like wheat, corn, and rice. In 2008 the chinese gov. concerned that grain exports were driving up food costs for domestic consumers, imposed a tax on grain exports.
a)Draw the graph that describes the market for grain in an exporting country. Use graph for questions to follow:
b)How does an export tax affect domestic grain prices?
c)How does it affect the welfare of domestic producers, and government revenue?
d) What happens to total welfare in China, as measured by the sum of consumer surplus,producer surplus, and tax revenue?

Reference no: EM13222923

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