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This is a question about the principles of economics.HW4 Q1.jpg

HW4 Q1.jpg

QUESTIONS. If you do so I will not
homework. When you write your answers, you should do it by yourself. If two or
more students hand in answers that are the same (or even mostly the same), each person will get
zero points for the homework. Other penalties may also be imposed.
1. (5 points) The diagram below shows the domestic demand and supply curves for a country for
apples. Assume that this is a small country that cannot affect the world price of apples.
T Price
84+
78 *
Domestic Supply
72+
66
60
A
World Price
B
G
it
30
C
24+
18+
12 +
Domestic Demand
400 800 1200 1600 2000 2400 2800
Quantity
(a) Does this country import or export apples? Please explain.
(b) What is the quantity of import or export?
(c) What is the consumer surplus after trade?
(d) What is the producer surplus after trade.
(e) What is the increase in total surplus after trade compared to before trade?

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