When South Africa adjusts its trade policy to allow free trade of limes, the price of one ton of limes in South Africa becomes $800. At this price, tons of limes will be demanded in South Africa, and tons will be supplied by domestic suppliers. Therefore, South Africa will export tons of limes. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. With Free Trade (Dollars) Without Free Trade (Dollars) Consumer Surplus Producer Surplus When South Africa allows free trade, the country's producer surplus by S by S and consumer surplus Therefore, the net effect of allowing international trade on South Africa's total surplus is a of

When South Africa adjusts its trade policy to allow free trade of limes, the price of one ton of limes in South Africa becomes $800. At this price, tons of limes will be demanded in South Africa, and tons will be supplied by domestic suppliers. Therefore, South Africa will export tons of limes. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. With Free Trade (Dollars) Without Free Trade (Dollars) Consumer Surplus Producer Surplus When South Africa allows free trade, the country's producer surplus by S by S and consumer surplus Therefore, the net effect of allowing international trade on South Africa's total surplus is a of

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

PRICE (Dollars perton)
1100 Domestic Demand
1000
900
800
700
600
500
400
300
200
100
0
35
Domestic Supply
P
W
70 105 140 175 210 245 280 315 350
QUANTITY (Tons of limes)
Consumer Surplus
Producer Surplus
Consumer Surplus
When South Africa adjusts its trade policy to allow free trade of limes, the price of one ton of limes in South Africa becomes $800. At this price,
tons of limes will be demanded in South Africa, and
tons will be supplied by domestic suppliers.
Therefore, South Africa will export
tons of limes.
Producer Surplus
Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade.
With Free Trade
(Dollars)
Without Free Trade
(Dollars)
When South Africa allows free trade, the country's producer surplus
by S
by S
and consumer surplus
. Therefore, the net effect of allowing international trade on South Africa's total surplus is a
of

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