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According to the numbers below. Does free trade help or hurt producers in the ROW? Does it benefit or harm consumers in the ROW? Before
According to the numbers below. Does free trade help or hurt producers in the ROW? Does it benefit or harm consumers in the ROW? Before Trade ($16) US CS = D = (32-16) *8*0.5 = $64 mil US PS = Above the supply curve below the price = ABC = 16 * 8 * 0.5 = $64 mil After Trade ($10) US - CS = BCDEFGH = (32 - 10) *11*0.5 = $121 mil US PS = A = 10*5*0.5 = $25 mil Change in Welfare US CS Change = BCDEFGH - D = BCEFGH = 121 - 64 = $57 US PC Change = ABC - A = -(BC) = -$26 mil Overall Change = BCEFGH - BC = EFGH = $57 - $26 = $31 mil
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