Due to a strike by truckers, trade in food between the United States and Mexico is halted.

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Due to a strike by truckers, trade in food between the United States and Mexico is halted.

In autarky, the price of Mexican grapes is lower than that of U.S. grapes. Using a diagram of the U.S. domestic demand curve and the U.S. domestic supply curve for grapes, explain the effect of these events on the following.

a. U.S. grape consumers’ surplus

b. U.S. grape producers’ surplus

c. U.S. total surplus

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Essentials Of Economics

ISBN: 9781429278508

3rd Edition

Authors: Paul Krugman, Robin Wells, Kathryn Graddy

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