1. Use Exhibit 3 to answer the following questions.

a. If trade is not allowed, what is the equilibrium price and quantity in this market?

b. If trade is allowed, will this country import or export this commodity? Why? C. If trade is allowed, what is the price at which the good is sold, the domestic quantity supplied and demanded, and the quantity imported or exported?

d. What area corresponds to consumer surplus if no trade is allowed?

e. What area corresponds to consumer surplus if trade is allowed?

f. What area corresponds to producer surplus if no trade is allowed? g. What area corresponds to producer surplus if trade is allowed? h. If free trade is allowed, who gains and who loses, the consumers or the producers, and what area corresponds to their gain or loss? i. What area corresponds to the gains from trade?