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Chapter 9 Homework Answer Keys

Chapter 9 Homework Answer Keys - is W the quantity consumed...

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Chapter 9 Homework Answer Keys 1. a. In Figure 1, with no international trade the equilibrium price is P 1 and the equilibrium quantity is Q 1 . Consumer surplus is area A and producer surplus is area B + C, so total surplus is A + B + C. Figure 1 b. When the Mexican orange market is opened to trade, the new equilibrium price
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Unformatted text preview: is W , the quantity consumed is D , the quantity produced domestically is S , and the quantity imported is D – S . Consumer surplus increases from A to A + B + D + E. Producer surplus decreases from B + C to C. Total surplus changes from A + B + C to A + B + C + D + E, an increase of D + E. 1...
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