The image displays a graph from a homework assignment in chapter 09 of an educational course on the platform Cengage Learning MindTap. It illustrates the domestic supply and demand curves for lemons in Jordan.### Graph Explanation:- **Axes:** - The x-axis represents the quantity of lemons in tons, ranging from 0 to 150. - The y-axis represents the price in dollars per ton, ranging from 100 to 1100.- **Lines and Points:** - The **Domestic Demand** curve (blue line) slopes downward from left to right. - The **Domestic Supply** curve (orange line) slopes upward from left to right. - The intersection point of these two curves marks the **Equilibrium without Trade**, indicated by a cross symbol (+).- **Surplus Areas:** - **Consumer Surplus** is represented by a green triangle. - **Producer Surplus** is shown as a purple triangle. ### Accompanying Text:The instructional text explains that the graph reflects the domestic supply and demand for lemons in Jordan, assuming no international trade. The total surplus in this scenario is unspecified and marked by a blank line.The scenario further suggests that if Jordan allows free trade, the world price for lemons, denoted by $ P_w $, is $700 per ton (marked by a horizontal black line). It assumes that international trade doesn't affect the world price, and there are no additional costs involved. Domestic suppliers aim to meet local demand as much as possible before engaging in trade.### Instructions for Students:Students are advised to use a green triangle symbol to denote the consumer surplus area and a purple diamond symbol to represent producer surplus on the graph.This analysis explores the economic concepts of market equilibrium, consumer surplus, and producer surplus in the context of free trade. The image contains a graph and a set of questions related to international trade and economic surplus. Here is a detailed description and explanation:**Graph Description:**The graph is a supply and demand graph that illustrates the market for lemons in Jordan, highlighting the concept of producer surplus. - **Axes:** - The x-axis represents the quantity of lemons (in tons), ranging from 0 to 150. - The y-axis represents the price (in dollars per ton), ranging from 0 to 700.- **Curves:** - There is a downward-sloping demand curve from the top left to the bottom right. - An upward-sloping supply curve starts from the bottom left to the top right. - A horizontal line marked $P_w$ represents the world price level.- **Shaded Area:** - The area above the supply curve and below the horizontal $P_w$ line is labeled as "Producer Surplus."**Questions and Tasks:**1. When Jordan adjusts its trade policy to allow the free trade of lemons, the price of one ton of lemons becomes $700. At this price: - Users need to fill in the blanks for the quantity of lemons demanded and supplied domestically, as well as the amount Jordan will export.2. A table needs to be completed: - Compare consumer and producer surplus with and without free trade in terms of dollars. - Analyze changes to producer and consumer surplus when free trade is allowed, and calculate the net effect on Jordan’s total surplus, labeled as either a gain or loss with the dollar amount specified.This exercise is designed to help students understand the effects of free trade on market equilibrium, consumer and producer surplus, and overall economic welfare.

Consumer Surplus is an economic measure of consumer satisfaction, which occurs when the price a…

Based on the information from the previous graph, absent international trade total surplus is $ The following graph shows the same domestic supply and demand curves for lemons in Jordan. Now, suppose that the Jordanian government changes. its stance on international trade, deciding to allow free trade in lemons. The horizontal black line (Pw) represents the world price of lemons at $700 per ton. Assume that Jordan'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. Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triangle (diamond symbol) to shade in the area representing producer surplus.

Based on the information from the previous graph, absent international trade total surplus is $ The following graph shows the same domestic supply and demand curves for lemons in Jordan. Now, suppose that the Jordanian government changes. its stance on international trade, deciding to allow free trade in lemons. The horizontal black line (Pw) represents the world price of lemons at $700 per ton. Assume that Jordan'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. Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triangle (diamond symbol) to shade in the area representing producer surplus.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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