« Tips ips CENGAGE MINDTAP MindTap Assignment 4 (Chapters 9,13) 告 275 260 245 230 0 25 50 75 100 125 150 175 200 QUANTITY (Tons of pears) 225 250 Q Search this course X When Zambia adjusts its trade policy to allow free trade of pears, the price of one ton of pears in Zambia becomes $350. At this price, 50 tons of pears will be demanded in Zambia, and 200 tons will be supplied by domestic suppliers. Therefore, Zambia will export tons of pears. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. Consumer Surplus Producer Surplus With Free Trade (Dollars) Without Free Trade (Dollars) When Zambia allows free trade, the country's producer surplus by $ and consumer surplus by $ Therefore, the net effect of allowing international trade on Zambia's total surplus is a of $ Grade It Now Save & Continue Continue without saving CENGAGE MINDTAP MindTap Assignment 4 (Chapters 9,13) Q s The following graph shows the same domestic supply and demand curves for pears in Zambia. Now, suppose that the Zambian government changes its stance on international trade, deciding to allow free trade in pears. The horizontal black line (Pw) represents the world price of pears at $350 per ton. Assume that Zambia's entry into the world market for pears has no effect on the world price and there are no transportation or transaction costs associated with international trade in pears. 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. PRICE (Dollars per ton) 380 Domestic Demand Domestic Supply 365 350 335 320 305 290 275 260 245 230 O 25 50 50 75 100 125 150 175 200 QUANTITY (Tons of pears) Consumer Surplus P W 225 250 Producer Surplus ?
« Tips ips CENGAGE MINDTAP MindTap Assignment 4 (Chapters 9,13) 告 275 260 245 230 0 25 50 75 100 125 150 175 200 QUANTITY (Tons of pears) 225 250 Q Search this course X When Zambia adjusts its trade policy to allow free trade of pears, the price of one ton of pears in Zambia becomes $350. At this price, 50 tons of pears will be demanded in Zambia, and 200 tons will be supplied by domestic suppliers. Therefore, Zambia will export tons of pears. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. Consumer Surplus Producer Surplus With Free Trade (Dollars) Without Free Trade (Dollars) When Zambia allows free trade, the country's producer surplus by $ and consumer surplus by $ Therefore, the net effect of allowing international trade on Zambia's total surplus is a of $ Grade It Now Save & Continue Continue without saving CENGAGE MINDTAP MindTap Assignment 4 (Chapters 9,13) Q s The following graph shows the same domestic supply and demand curves for pears in Zambia. Now, suppose that the Zambian government changes its stance on international trade, deciding to allow free trade in pears. The horizontal black line (Pw) represents the world price of pears at $350 per ton. Assume that Zambia's entry into the world market for pears has no effect on the world price and there are no transportation or transaction costs associated with international trade in pears. 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. PRICE (Dollars per ton) 380 Domestic Demand Domestic Supply 365 350 335 320 305 290 275 260 245 230 O 25 50 50 75 100 125 150 175 200 QUANTITY (Tons of pears) Consumer Surplus P W 225 250 Producer Surplus ?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:«
Tips
ips
CENGAGE MINDTAP
MindTap Assignment 4 (Chapters 9,13)
告
275
260
245
230
0 25 50 75 100 125 150 175 200
QUANTITY (Tons of pears)
225 250
Q Search this course
X
When Zambia adjusts its trade policy to allow free trade of pears, the price of one ton of pears in Zambia becomes $350. At this price,
50 tons of pears will be demanded in Zambia, and
200 tons will be supplied by domestic suppliers. Therefore,
Zambia will export
tons of pears.
Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade.
Consumer Surplus
Producer Surplus
With Free Trade
(Dollars)
Without Free Trade
(Dollars)
When Zambia allows free trade, the country's producer surplus
by $
and consumer surplus
by
$
Therefore, the net effect of allowing international trade on Zambia's total surplus is a
of $
Grade It Now
Save & Continue
Continue without saving
Transcribed Image Text:CENGAGE MINDTAP
MindTap Assignment 4 (Chapters 9,13)
Q s
The following graph shows the same domestic supply and demand curves for pears in Zambia. Now, suppose that the Zambian government changes
its stance on international trade, deciding to allow free trade in pears. The horizontal black line (Pw) represents the world price of pears at $350 per
ton. Assume that Zambia's entry into the world market for pears has no effect on the world price and there are no transportation or transaction costs
associated with international trade in pears. 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.
PRICE (Dollars per ton)
380
Domestic Demand
Domestic Supply
365
350
335
320
305
290
275
260
245
230
O
25
50
50
75 100
125 150 175 200
QUANTITY (Tons of pears)
Consumer Surplus
P
W
225 250
Producer Surplus
?
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