Figure: The Market for Roses Price of roses (per box) Domestic supply demand Qr

Question

Figure: The Market for Roses Price of roses (per box) Domestic supply demand Qr 9AC Quantity of roses (boxes) Imports 6. (Figure: The Market for Roses in which the world price is Pw) Look at the figure The Market for Roses. In the figure, consumer surplus without international trade would be area or areas: A)W+X+Y B)Z D) W 7. (Figure: The Market for Roses in which the world price is Pw) Look at the figure The Market for Roses. In the figure, consumer surplus with international trade would be area or areas: B) Z C)W+X+ Z. D) w. 8. (Figure: The Market for Roses) Look at the figure The Market for Roses. In the figure, producer surplus with international trade would be area or areas A)X Y Z. B) W+X+Y C)X+Y D) Y

Explanation / Answer

6> d> W

Without international trade, the consumer surplus would be the area over the market price.

7> c> W+X+Z

Arter international trade, the consumer surplus increases and it ignores the domestic supply line.

8> d> Y

Customers will not buy when the price charged by the domestic producer will be higher than the world price.

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