This preview shows page 1. Sign up to view the full content.
Unformatted text preview: g before any trade occurs.
(i) Equilibrium price and quantity
(ii) Area of consumer surplus
(iii) Area of producer surplus
(b) Using the labeling of the graph, identify the amount of grain that Country X will import if it engages in trade
and the world price of grain is at PW.
(c) Now assume that Country X imposes a tariff that raises the price of grain from the free-trade case to PT.
Using the labeling of the graph, identify the change in each of the following.
(i) Domestic production
(ii) Domestic consumption
(iii) Consumer surplus
(iv) Producer surplus Copyright © 2003 by College Entrance Examination Board. All rights reserved.
Available to AP professionals at apcentral.collegeboard.com and to
students and parents at www.collegeboard.com/apstudents. GO ON TO THE NEXT PAGE.
3 2003 AP® MICROECONOMICS FREE-RESPONSE QUESTIONS (Form B)
3. Leadmill Company is a perfectly competitive pencil-manufacturing firm. Leadmill can sell all of the pencils it
produces at a market price of $2 per dozen and can hire all the workers it needs at a wage rate of $8 per hour.
The output of the workers at Leadmill i...
View Full Document
This note was uploaded on 02/03/2014 for the course ECONOMIC 112 taught by Professor Van le during the Fall '12 term at American Internation College.
- Fall '12
- van le