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Question: consider the sudanese market for tangerines the following graph shows...

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Consider the Sudanese market for tangerines. The following graph shows the domestic demand and domestic supply curves for tangerines in Sudan. Suppose Sudans government currentiy does not allow international trade in tangerines. Use the black point (plus symbol) to indicate the equilibrium price of a ton of tangerines and the equilibrium quantity of tangerines in Sudan in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally use the purple triangle (diamond symbol) to shade the area representing producer surplus in equiibrium. 。620 Domestic Demand Oomestic Supply Equilibrium without Trade 560 530 Consumer Surplus 500 T 470t 440 Producer Surplus 410 380 350 320 0 25 50 75100 125 150 17S 200 225 250 QUANTITY (Tons of tangerines)
Based on the previous graph, total surplus in the absence of international trade is S graph shows the same domestic demand and supply curves for tangerines in Sudan. Suppose that the Sudanese government changes its ational trade policy to allow free trade in tangerines. The horizontal black line (Pv) represents the world price of tangerines at $500 per ton. Assume that Sudans entry into the world market for tangerines has no effect on the world price and there are no transportation or transaction costs associated with international trade in tangerines. Also assume that domestic suppliers will satisty domestic demand as much as pos exporting or importing takes place Use the green triangle (triangle symbol) to shede consumer surplus, and then use the purple triangle (diamond symbol) to shade producer surplus. 620 Domestic Demand 590 560 Domestic Supply Consumer Surplus 530 500 Producer Surplus 350 320 0 25 50 75 100 125 150 175 200 225 250 QUANTITY (Tons of tangerines) O Type here to search
When Sudan allows free trade of tangerines, the price of a ton of tangerines in Sudan will be s500. At this p tangerines will be demanded in Sudan, and ice, tons of tons will be supplied by domestic suppliers. Therefore, Sudan will export tons of tangerines. 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 When Sudan allows free trade, the countrys consumer surplusby S , and producer surplus b So, the net effect of international trade on Sudans total surplus is aof SG Grade It Now Continue without saving
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