Consider the Honduran market for soybeans. The following graph shows the domestic demand and domestic supply curves for soybeans in Honduras. Suppose Honduras's government currently does not allow international trade in soybeans. Use the black point (plus symbol) to indicate the equilibrium price of a ton of soybeans and the equilibrium quantity of soybeans in Honduras in the absence of international trade. Then, use the green triangie (triangie symbol) to shade the area representing consumer surpius in equilibrum. Finally, use the purpie triangle (diamond symbol) to shade the area representing producer surpius in equilibrum. 380 Domestic Demand Domestic Supply 365 Equilibrium without Trade 350 335 320 Consumer Surplus 305 290 Producer Surplus 275 260 245 230 25 50 75 100 125 150 175 200 225 250 QUANTITY (Tans of saybeans) Based on the previous graph, total surplus in the absence of international trade is s PRICE (Dollars per ton)

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
Question
Consider the Honduran market for soybeans.
The following graph shows the domestic demand and domestic supply curves for soybeans in Honduras. Suppose Honduras's government currently
does not allow international trade in soybeans.
Use the black point (plus symbol) to indicate the equilibrium price of a ton of soybeans and the equilibrium quantity or soybeans in Honduras in the
absence of international trade. Then, use the green triangie (triangie symbol) to shade the area representing consumer surplus in equilibrium. Finally,
use the purpie triangle (diamond symbol) to shade the area representing producer surpius in equilibrum.
Domestic Supply
380
Domestic Demand
365
Equilibrium without Trade
350
335
320
Consumer Surplus
305
290
Producer Surplus
275
260
245
230
25
50
75
100
125
150
175
200
225
250
QUANTITY (Tans of saybeans)
Based on the previous graph, total surplus in the absence of international trade is s
PRICE (Dollars per ton)
Transcribed Image Text:Consider the Honduran market for soybeans. The following graph shows the domestic demand and domestic supply curves for soybeans in Honduras. Suppose Honduras's government currently does not allow international trade in soybeans. Use the black point (plus symbol) to indicate the equilibrium price of a ton of soybeans and the equilibrium quantity or soybeans in Honduras in the absence of international trade. Then, use the green triangie (triangie symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purpie triangle (diamond symbol) to shade the area representing producer surpius in equilibrum. Domestic Supply 380 Domestic Demand 365 Equilibrium without Trade 350 335 320 Consumer Surplus 305 290 Producer Surplus 275 260 245 230 25 50 75 100 125 150 175 200 225 250 QUANTITY (Tans of saybeans) Based on the previous graph, total surplus in the absence of international trade is s PRICE (Dollars per ton)
The following graph shows the same domestic demand and supply curves for soybeans in Honduras. Suppose that the Honduran government changes
Its international trade policy to allow free trade in soybeans. The horizontal black line (Pw) represents the world price of soybeans at $350 per ton.
Assume that Honduras's entry into the world market for soybeans has no effect on the world price and there are no transportation or transaction costs
associated with intemational trade in soybeans. 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 consumer surplus, and then use the purple triangle (dlamond symbol) to shade producer surplus.
380
Domestic Demand
Domestic Supply
365
Consumer Surplus
350
335
320
Producer Surplus
305
290
275
260
245
230
25
50
75
100
125
150
175
200
225 200
QUANTITY (Tons of saybeans)
When Honduras allows free trade of soybeans, the price of a ton of soybeans in Honduras will be $350. At this price,
tons of
soybeans will be demanded in Honduras, and
|tons will be supplied by domestic suppliers. Therefore, Honduras will export
|tons of soybeans.
Using the information from the previous tasks, compiete the following table to analyze the weifare effect of allowing free trade.
Without Free Trade
With Free Trade
(Dollars)
(Dollars)
Consumer Surplus
Producer Surplus
When Honduras allows free trade, the country's consumer surplus
, and producer surplus
by $
So, the net effect of intenational trade on Honduras's total surplus is a
of
PRICE (Dollars per ton)
Transcribed Image Text:The following graph shows the same domestic demand and supply curves for soybeans in Honduras. Suppose that the Honduran government changes Its international trade policy to allow free trade in soybeans. The horizontal black line (Pw) represents the world price of soybeans at $350 per ton. Assume that Honduras's entry into the world market for soybeans has no effect on the world price and there are no transportation or transaction costs associated with intemational trade in soybeans. 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 consumer surplus, and then use the purple triangle (dlamond symbol) to shade producer surplus. 380 Domestic Demand Domestic Supply 365 Consumer Surplus 350 335 320 Producer Surplus 305 290 275 260 245 230 25 50 75 100 125 150 175 200 225 200 QUANTITY (Tons of saybeans) When Honduras allows free trade of soybeans, the price of a ton of soybeans in Honduras will be $350. At this price, tons of soybeans will be demanded in Honduras, and |tons will be supplied by domestic suppliers. Therefore, Honduras will export |tons of soybeans. Using the information from the previous tasks, compiete the following table to analyze the weifare effect of allowing free trade. Without Free Trade With Free Trade (Dollars) (Dollars) Consumer Surplus Producer Surplus When Honduras allows free trade, the country's consumer surplus , and producer surplus by $ So, the net effect of intenational trade on Honduras's total surplus is a of PRICE (Dollars per ton)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Similar questions
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman