Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triangleshade in the area representing producer surplus.PRICE (Dollars per ton)1000 Domestic Demand90080070060050040030020010000Domestic Supply50 100 150 200 250 300 350QUANTITY (Tons of limes)Pw400 450 500Consumer SurplusProducer SurplusWhen 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, andtons will be supplied by domestic suppliers.Therefore, South Africa will exporttons 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 SurplusProducer Surplusby $and consumer surplusTherefore, the net effect of allowing international trade on South Africa's total surplus is aWhen South Africa allows free trade, the country's producer surplusby $of The graph below shows the domestic supply and demand curves for limes in South Africa. Assume that South Africa's government does not currentlypermit international trade in limes.Use the black point (plus symbol) to denote the equilibrium price of one ton of limes and the equilibrium quantity of limes in South Africa withoutinternational trade. Next, use the green triangle (triangle symbol) to shade in the area that represents consumer surplus in equilibrium. Finally, usethe purple triangle (diamond symbol) to shade in the area that represents producer surplus in equilibrium.PRICE (Dollars per ton)100090080070060050040030020010000Domestic DemandDomestic Supply50 100 150 200 250 300 350 400QUANTITY (Tons of limes)450500+Equilibrium without TradeConsumer SurplusProducer SurplusBased on the information from the previous graph, absent international trade total surplus is $The following graph shows the same domestic supply and demand curves for limes in South Africa. Now, suppose that the South African governmentchanges its stance on international trade, deciding to allow free trade in limes. The horizontal black line (Pw) represents the world price of limes at$800 per ton. Assume that South Africa's entry into the world market for limes has no effect on the world price and there are no transportation ortransaction costs associated with international trade in limes. Also assume that domestic suppliers will satisfy domestic demand as much as possiblebefore any exporting or importing takes place.

Answered: Image /qna-images/answer/7b2d1f71-3436-49cb-b2a9-1cc27e54b78f.jpg

Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triang shade in the area representing producer surplus PRICE (Dollars per on) 300 800 100 Domestic Demand Domestic Supply P 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of times) 20 Consumer Surplus Producer 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 will be supplied by domestic suppliers. tons of limes will be demanded in South Africa, and [ 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. Without Free Trade With Free Trade (Dollars) (Dollars) Consumer Surplus Producer Surplus 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 allows free trade, the country's producer surplus by S

Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triang shade in the area representing producer surplus PRICE (Dollars per on) 300 800 100 Domestic Demand Domestic Supply P 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of times) 20 Consumer Surplus Producer 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 will be supplied by domestic suppliers. tons of limes will be demanded in South Africa, and [ 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. Without Free Trade With Free Trade (Dollars) (Dollars) Consumer Surplus Producer Surplus 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 allows free trade, the country's producer surplus by S

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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