Consider Figure 3 for the economy of alpha where the price under autarky is $24.

Question

Consider Figure 3 for the economy of alpha where the price under autarky is $24..... what is the value for C.S. under autarky? 1352 2704 7200 3600 Consider Figure 3. For the economy of alpha, suppose they engage in free and open trade and Pw = 20. If the amount of imports are the difference between Qd = 120 and Qs = 80, what is the value for C.S. under free trade? 5625 7200 1310 1800 Consider Figure 3. For the economy of alpha, if a tariff is imposed that pushes the domestic price up to 22. Government revenues from this policy are best calculated by $20*amount of exports $20*amount of imports $22*amount of exports $22*amount of imports When we talked about social surplus (or total surplus, or societal welfare) for a particular country, we said that whenever the marginal benefits were greater than marginal costs for a particular level of output, then output should continue output should stop social surplus is optimized social surplus is maximized

Explanation / Answer

a) answer is part a , consumer surplus = 1/2 *b*h = 1/2 (50-26)*24 = 1352

b)annswer is 1800

c) government will impose $22*amount of imports to gain welfare from imports in the country .

d) answer is output should stop , because the firms or producers will incurr massive losses beyond this point .

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