When China's clothing industry expands, the increase in the world supply lowers the world price of clothing. A. Draw an appropriate diagram to analyze how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that imports clothing, such as the United States. B. Now, draw an appropriate diagram to show how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that exports clothing, such as the Dominican Republic. C. Compare your answers (a) and (b). what are the similarities, and what are the differences? Which country should be concerned about the expansion of the Chinese textile industry? Which country should be applauding it? Explain.
When China's clothing industry expands, the increase in the world supply lowers the world price of clothing. A. Draw an appropriate diagram to analyze how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that imports clothing, such as the United States. B. Now, draw an appropriate diagram to show how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that exports clothing, such as the Dominican Republic. C. Compare your answers (a) and (b). what are the similarities, and what are the differences? Which country should be concerned about the expansion of the Chinese textile industry? Which country should be applauding it? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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When China’s clothing industry expands, the increase in the world supply lowers the world price of clothing.
- Draw an appropriate diagram to analyze how this change in price affects
consumer surplus ,producer surplus , and total surplus in a nation that imports clothing, such as the United States. - Now, draw an appropriate diagram to show how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that exports clothing, such as the Dominican Republic.
- Compare your answers (a) and (b). what are the similarities, and what are the differences? Which country should be concerned about the expansion of the Chinese textile industry? Which country should be applauding it? Explain.
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