1. Given the demand and supply for an exporting country, please answer the questions below: $ P W Po B C exports domestic supply world price domestic demand Where Pw is the world price, PO is domestic equilibrium price. a. Find the total surplus (welfare) before trade? b. Find the total surplus after free trade? Please show the gains from trade. 3

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter35: International Trade Restrictions
Section: Chapter Questions
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1. Given the demand and supply for an exporting country, please answer the questions
below:
$
P
W
Po
B
C
exports
domestic supply
world price
domestic demand
Where Pw is the world price, PO is domestic equilibrium price.
a. Find the total surplus (welfare) before trade?
b. Find the total surplus after free trade? Please show the gains from trade.
3
Transcribed Image Text:1. Given the demand and supply for an exporting country, please answer the questions below: $ P W Po B C exports domestic supply world price domestic demand Where Pw is the world price, PO is domestic equilibrium price. a. Find the total surplus (welfare) before trade? b. Find the total surplus after free trade? Please show the gains from trade. 3
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