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ome ses og and Study Tools al Options ge Success Tips er Success Tips Twain that delive Fedtap Problems & Applications (Ch 09) Attempts Average/3 1. Problems and Applications Q1 The world price of wine is below the price that would prevail in Canada in the absence of trade. Assume that Canadian imports of wine are a small part of total world wine production. The following graph shows the Canadian market for wine under free trade. wel een bangle symbol) to shade consumer surplus when Canada is open to trade. Then use the purple triangle (diamond symbol) to de duc surn this case. Domestic Demand Domestic Supply Consumer Surplus oducer Surplus World Price Price of Wine Q Search
d Study Tools ions access Tips ccess Tips OR YOU hinacea dback Problems & Applications (Ch 09) Now, suppose that an unusual shift of the Gulf Stream leads to an unseasonably cold summer in Europe, destroying much of the grape harvest there. In the following graph, show the effect of this change in weather conditions on the world price of wine by shifting the World Price line Then use the green triangle (triangle symbol) to shade consumer surplus when Canada is open to trade at this new world price. Finally, use the purple triangle (diamond symbol) to shade producer surplus in this case. (?) Domesto Demand Domes Bupply World Price New Consumer Surplus Wind Price New Producer Sup Price of Wine Quarity of Wine and Canada whole is better off 0x