3. Home imposes a specific tariff of 0.5 on wheat imports. a. Determine and graph the effects of the tariff on the following: (1) the price of wheat in each country; (2) the quantity of wheat supplied and demanded in each country; (3) the volume of trade. b. Determine the effect of the tariff on the welfare of each of the following groups: (1) Home import-competing producers: (2) Home consumers; (3) the Home government. c. Show graphically and calculate the terms of trade gain, the efficiency loss, and the total effect on welfare of the tariff.
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