Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. The following graph shows the same domestic demand and supply curves for lemons in New Zealand. Suppose that the New Zealand governmentchanges its international trade policy to allow the free trade of lemons. The horizontal black line (PW) represents the world price of lemons at $800per ton. Assume that New Zealand's entry into the world market for lemons has no effect on the world price and there are no transportation ortransaction costs associated with international trade in lemons. Also assume that domestic suppliers will satisfy domestic demand as much as possiblebefore any exporting or importing takes place.Use the green point (triangle symbol) to shade consumer surplus, and then use the purple point (diamond symbol) to shade producer surplus.PRICE (Dollars per tons)1360Domestic DemandDomestic Supply12901220115010801010940870800730PW6600 50100 150 200 250 300 350 400QUANTITY (Thousands of tons of lemons)450500Consumer SurplusProducer Surplustons of lemonsWhen New Zealand allows free trade of lemons, the price of a ton of lemons in New Zealand will be $800. At this price, 400,000will be demanded in New Zealand, and 100,000 tons will be supplied by domestic suppliers. Therefore, New Zealand will import 300,000tons of lemons.

The consumer is willing to pay a certain amount for a good or service. If the actual price of it is…

When New Zealand allows free trade of lemons, the price of a ton of lemons in New Zealand will be $800. At this price, 400,000 tons of lemons will be demanded in New Zealand, and 100,000 tons will be supplied by domestic suppliers. Therefore, New Zealand will import 300,000

When New Zealand allows free trade of lemons, the price of a ton of lemons in New Zealand will be $800. At this price, 400,000 tons of lemons will be demanded in New Zealand, and 100,000 tons will be supplied by domestic suppliers. Therefore, New Zealand will import 300,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

The following graph shows the same domestic demand and supply curves for lemons in New Zealand. Suppose that the New Zealand government
changes its international trade policy to allow the free trade of lemons. The horizontal black line (PW) represents the world price of lemons at $800
per ton. Assume that New Zealand'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 point (triangle symbol) to shade consumer surplus, and then use the purple point (diamond symbol) to shade producer surplus.
PRICE (Dollars per tons)
1360
Domestic Demand
Domestic Supply
1290
1220
1150
1080
1010
940
870
800
730
PW
660
0 50
100 150 200 250 300 350 400
QUANTITY (Thousands of tons of lemons)
450
500
Consumer Surplus
Producer Surplus
tons of lemons
When New Zealand allows free trade of lemons, the price of a ton of lemons in New Zealand will be $800. At this price, 400,000
will be demanded in New Zealand, and 100,000 tons will be supplied by domestic suppliers. Therefore, New Zealand will import 300,000
tons of lemons.

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