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Now suppose the U.S. opens up to trade, and the world price of steel is $200 per ton. b. At the world price, the domestic quantity supplied is demanded is thousand tons. thousand tons of steel, and the quantity c. The United States will "import" or "export," and in the 2nd blank enter the quantity of imports/exports.] thousand tons of steel. [In the first blank, enter either
d. Complete the table below by calculating Consumer, Producer, and Total Surplus under autarky and after opening up to trade. When calculating surplus, be mindful of our units. In this case we have price per ton on the y-axis, and thousands of tons on the x-axis. That means when we calculate surplus, our answers will be in thousands of dollars. Don't forget to add the thousands when you enter your answers below! One additional reminder: When we calculate surplus after trade, we will have a single price, but two quantities. We will need to use the domestic quantity supplied for Producer Surplus, and the domestic quantity demanded for Consumer Surplus. Consumer Surplus Producer Surplus Total Surplus +A +A $ Under Autarky VA VA EA $ With Trade
e. When the U.S. opens up to trade, consumer surplus [Select] and total surplus [Select] [Select] , producer surplus f. Does opening up to trade cause deadweight loss in the market for poultry? [Select]
g. Briefly describe the welfare impacts of opening up to trade. Which group(s) benefited from trade? Which group(s) are worse off? Is free trade efficient? How do you know? Think about the tradeoffs involved in opening up to trade. Economists are generally pro-trade because of gains from trade, but there are always going to be downsides. Regardless of whether a country is a net-importer or exporter, there will be one party which is made worse off by trade.