1. Welfare effects of free trade in an exporting countryThe following problem analyzes the Guatemalan market for melons.The graph below shows the domestic supply and demand curves for melons in Guatemala. Assume that Guatemala's government does not currentlypermit international trade in melons.Use the black point (plus symbol) to denote the equilibrium price of one ton of melons and the equilibrium quantity of melons in Guatemala 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)590 Domestic DemandDomestic Supply5605305004704404103803503202900 306090 120 150 180 210 240 270 300QUANTITY (Tons of melons)Equilibrium without TradeConsumer Surplus1시시Producer SurplusBased on the information from the previous graph, absent international trade total surplus is $?

Market equilibrium(E) is a state where the quantity(Q) of goods or services demanded by buyers…

PRICE (Dollars per tom 470 440 410 380 350 320 290 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Tons of melons) Consumer Surplus Producer Surplus Based on the information from the previous graph, absent international trade total surplus is $

PRICE (Dollars per tom 470 440 410 380 350 320 290 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Tons of melons) Consumer Surplus Producer Surplus Based on the information from the previous graph, absent international trade total surplus is $

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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