Q.2 Gains from free trade- graph The table below provides information on domestic demand and supply of butter (per week) in the Australian market. Price (S/per Quantity Quantity demanded supplied Kg) (kg '000) (kg '000) 8.00 12 0 10.00 9 4 12.00 6 6 14.00 3 8 16.00 0 10 World price of butter is $10 per kilo. a) Assuming free trade, and ceteris paribus draw a graph to illustrate the Australian market for butter. Your graph should clearly label the quantities of domestic demand, domestic supply and imports b) Use your graph to calculate consumer surplus with trade and without trade. Show the detailed calculations

Q.2 Gains from free trade- graph The table below provides information on domestic demand and supply of butter (per week) in the Australian market. Price (S/per Quantity Quantity demanded supplied Kg) (kg '000) (kg '000) 8.00 12 0 10.00 9 4 12.00 6 6 14.00 3 8 16.00 0 10 World price of butter is $10 per kilo. a) Assuming free trade, and ceteris paribus draw a graph to illustrate the Australian market for butter. Your graph should clearly label the quantities of domestic demand, domestic supply and imports b) Use your graph to calculate consumer surplus with trade and without trade. Show the detailed calculations

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter34: Globalization And Protectionism

Section: Chapter Questions

Problem 2SCQ: Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign...

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