3 Assume that initially RicardoLand does not trade with the outside world and the price of grain in RicardoLand is $5 a bushel. Further assume that RicardoLand is such a small country that it can’t affect the world price for grain.

a. Draw the relevant supply and demand curves. Now assume that Ricardo-

Land opens itself up to trade and the world price of grain is $9 a bushel.

Show the change in total consumers’ surplus and total producers’ surplus resulting from trade.

b. Repeat

(a) but assume that the world price of grain is $2 a bushel.

c. If the world price of grain is $2 a bushel, show the deadweight loss caused by a $1.50–per–bushel tariff.