This problem asks you to examine the welfare effects of opening trade between the two countries. Please draw new graphs (separate from question 1). a. Label the area in your graph that represents consumer surplus in the ROW before trade. What is the $ value of consumer surplus? Label the area in your graph that represents producer surplus in the ROW before trade. What is the $ value of producer surplus? Label the area in your graph that represents consumer surplus in the ROW after the opening of trade with the US. What is the $ value of consumer surplus? Label the area in your graph that represents producer surplus in the ROW after the opening of trade with the US. What is the $ value of producer surplus? How much does the ROW gain from trade? ROW consumers? ROW producers? Give $values

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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2.
This problem asks you to examine the welfare effects of opening trade between the two countries.
Please draw new graphs (separate from question 1).
a.
b.
C.
d.
e.
Figurs
Label the area in your graph that represents consumer surplus in the ROW before trade. What is
the $value of consumer surplus?
Label the area in your graph that represents producer surplus in the ROW before trade. What is
the $ value of producer surplus?
Label the area in your graph that represents consumer surplus in the ROW after the opening of
trade with the US. What is the $ value of consumer surplus?
Label the area in your graph that represents producer surplus in the ROW after the opening of
trade with the US. What is the $ value of producer surplus?
How much does the ROW gain from trade? ROW consumers? ROW producers? Give $ values.
Transcribed Image Text:2. This problem asks you to examine the welfare effects of opening trade between the two countries. Please draw new graphs (separate from question 1). a. b. C. d. e. Figurs Label the area in your graph that represents consumer surplus in the ROW before trade. What is the $value of consumer surplus? Label the area in your graph that represents producer surplus in the ROW before trade. What is the $ value of producer surplus? Label the area in your graph that represents consumer surplus in the ROW after the opening of trade with the US. What is the $ value of consumer surplus? Label the area in your graph that represents producer surplus in the ROW after the opening of trade with the US. What is the $ value of producer surplus? How much does the ROW gain from trade? ROW consumers? ROW producers? Give $ values.
1.
Two countries produce and consume T-shirts: the US and the ROW. Problems 1-2 are based on the supply and
demand schedules for the two countries given below. Note: The supply and demand curves are straight lines.
Quantities are in millions of T-shirts.
P
10
2
3
4
5
6
7
8
9
11
13
14
15
16
12
0
This problem asker
S
0.
0
1
2
3
9
10
11
12
0
0
0
4
5
6
7
8
US
D
32
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
S
0
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
ROW
D
13
12
11
10
9
8
7
6
5
4
3
2
1
0
0
0
Transcribed Image Text:1. Two countries produce and consume T-shirts: the US and the ROW. Problems 1-2 are based on the supply and demand schedules for the two countries given below. Note: The supply and demand curves are straight lines. Quantities are in millions of T-shirts. P 10 2 3 4 5 6 7 8 9 11 13 14 15 16 12 0 This problem asker S 0. 0 1 2 3 9 10 11 12 0 0 0 4 5 6 7 8 US D 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 S 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 ROW D 13 12 11 10 9 8 7 6 5 4 3 2 1 0 0 0
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