- Done Aa Ng Cengage Com Cengage Mindtap Homework Ch 09 1 Welfare Effects Of Free Trade In An Exporting Country Consid 1 (38.32 KiB) Viewed 12 times
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- Done Aa Ng Cengage Com Cengage Mindtap Homework Ch 09 1 Welfare Effects Of Free Trade In An Exporting Country Consid 3 (34.63 KiB) Viewed 12 times
... ng.cengage.com Homework (Ch 09) Based on the previous graph, total surplus in the absence of international trade is m The following graph shows the same domestic demand and supply curves for lemons in New Zealand, Suppose that the New Zealand government changes its international trade policy to allow free trade in lemons. The horizontal black line (Pa) represents the world price of lemons at $800 per ton. Assume that New Zealand's entry into the world market for lemons has no effect on the world price and there are no transportation or transaction costs associated with international trade in lemons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. P Use the green triangle (triangle symbol) to shade consumer surplus, and then use the purple triangle (diamond symbol) to shade producer surplus. 100 Domestic Demand Domestic Supply 850 HS Consumer Surplus 800 750 Producer Surplus 550 100 450 400 020 4) 00 80 100 120 140 100 180 200 QUANTITY (Tons of lemons) tons of When New Zealand allows free trade of lemons, the price of a ton of lemons in New Zealand will be $800. At this price, lemons will be demanded in New Zealand, and tons will be supplied by domestic suppliers. Therefore, New Zealand will export Done< #18 AA CENGAGE MINDTAP +€ Q Search this course 39%1 ✪ Co A-Z
Done< * 8 m AA CENGAGE MINDTAP Homework (Ch 09) 750 PRICE (Dolars perton) 700 850 Producer Surplus 0 20 43 60 80 100 120 140 0 180 200 QUANTITY (Tons of lemons) When New Zealand allows free trade of lemons, the price of a ton of lemons in New Zealand will be $800. At this price, lemons will be demanded in New Zealand, and tons of lemons. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. With Free Trade Without Free Trade (Dollars) (Dollars) Consumer Surplus Producer Surplus When New Zealand allows free trade, the country's consumer surplus and producer surplus by s So, the net effect of international trade on New Zealand's total surplus is a Grade It Now ng.cengage.com 500 450 400 tons of tons will be supplied by domestic suppliers. Therefore, New Zealand will export Save & Continue Continue without saving +€ Q Search this course 39%1 ✪ Co A-Z