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Unformatted text preview: 0 1 2 3 4 Quantity 0 i ii iii iv Price c. (2 points) Using the areas ‘A’ through ‘P’ identified in the graph above, what is the effect of this prohibition of imports on the net economic surplus in this market? Stated alternatively, how large would the economic gains have to be, from an economic efficiency perspective, to justify this intervention of protecting native biota via this import ban? E+F+G+H+I+J+M+N represents the difference in NES World Supply of Durian, including Australia (=marginal cost) Price $AU Australian Supply of Durian (=marginal cost) A B C D F G H I J E K Australian Demand (= marginal benefit) Quantity L M N O P iv iii ii i 0 between world supply and AU only supply. The positive effects on biota would have to be at least this large....
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This note was uploaded on 11/06/2008 for the course AEM 2500 taught by Professor Poe,g. during the Fall '07 term at Cornell.
- Fall '07