The following graph shows the domestic demand and domestic supply curves for tangerines in Panama. Suppose Panama's government currently does not allow international trade in tangerines. Use the black point (plus symbol) to indicate the equilibrium price of a ton of tangerines and the equilibrium quantity of tangerines in Panama in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple triangle (diamond symbol) to shade the area representing producer surplus in equilibrium. PRICE (Dollars per ton) 660 620 580 540 460 420 380 340 300 260 0 Domestic Demand 30 Domestic Supply 60 90 120 150 180 210 240 270 300 QUANTITY (Tons of tangerines) jalal Equilibrium without Trade Consumer Surplus Producer Surplus Based on the previous graph, total surplus in the absence of international trade is $ The following graph shows the same domestic demand and supply curves for tangerines in Panama. Suppose that the Panamanian government changes its international trade policy to allow free trade in tangerines. The horizontal black line (Pw) represents the world price of tangerines at $500 per ton. Assume that Panama's entry into the world market for tangerines has no effect on the world price and there are no transportation or transaction costs associated with international trade in tangerines. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.
The following graph shows the domestic demand and domestic supply curves for tangerines in Panama. Suppose Panama's government currently does not allow international trade in tangerines. Use the black point (plus symbol) to indicate the equilibrium price of a ton of tangerines and the equilibrium quantity of tangerines in Panama in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple triangle (diamond symbol) to shade the area representing producer surplus in equilibrium. PRICE (Dollars per ton) 660 620 580 540 460 420 380 340 300 260 0 Domestic Demand 30 Domestic Supply 60 90 120 150 180 210 240 270 300 QUANTITY (Tons of tangerines) jalal Equilibrium without Trade Consumer Surplus Producer Surplus Based on the previous graph, total surplus in the absence of international trade is $ The following graph shows the same domestic demand and supply curves for tangerines in Panama. Suppose that the Panamanian government changes its international trade policy to allow free trade in tangerines. The horizontal black line (Pw) represents the world price of tangerines at $500 per ton. Assume that Panama's entry into the world market for tangerines has no effect on the world price and there are no transportation or transaction costs associated with international trade in tangerines. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 8PA
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