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1000 Domestic Demand Domestic Supply 900 Consumer Surplus 800 PW 700 Producer Surplus PRICE (Dollars per ton) 400 300 200 100 0 50 100 150
1000 Domestic Demand Domestic Supply 900 Consumer Surplus 800 PW 700 Producer Surplus PRICE (Dollars per ton) 400 300 200 100 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of lemons) When Bolivia allows free trade of lemons, the price of a ton of lemons in Bolivia will be $800. At this price, tons of lemons will be demanded in Bolivia, and tons will be supplied by domestic suppliers. Therefore, Bolivia will export tons of lemons.Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. Without Free Trade With Free Trade (Dollars) (Dollars) Consumer Surplus Producer Surplus When Bolivia allows free trade, the country's consumer surplus by $ , and producer surplus by .So, the net effect of international trade on Bolivia's total surplus is a of
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