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Complete the table below by calculating Consumer, Producer, and Total Surplus under autarky and after opening up to trade. [Remember, we also calculated surplus in
Complete the table below by calculating Consumer, Producer, and Total Surplus under autarky and after opening up to trade. [Remember, we also calculated surplus in this market in Problem 1.]
d. Complete the table below by calculating Consumer, Producer, and Total Surplus under autarky and after opening up to trade. [Remember, we also calculated surplus in this market in Problem 1.] One additional reminder: When we calculate surplus after trade, we will have a single price, but two quantities. We will need to use the domestic quantity supplied for Producer Surplus, and the domestic quantity demanded for Consumer Surplus. Welfare Analysis of Trade: Market for Widgets Under Autarky With Trade Consumer Surplus LA tA Producer Surplus $ $ Total Surplus $ $Remember the price floor problem from Problem Set 2? Let's return to that market for widgets, but instead of imagining a floor of $12, let's suppose that this is a tiny country that opens up to trade, and the world price is $12 per widget. Assume that this country is a small enough part of the world market that its decision to open up to trade does not impact the world price. Supply and Demand for Widgets Price $22 $20 $18 $16 S $14 $12 $10 Pworld $8 $6 $4 $2 0 20 40 60 80 100 120 140 Quantity a. Under autarky, the domestic equilibrium quantity is widgets, and the equilibrium price is $ per widget. b. At the world price, the domestic quantity supplied is widgets, and the quantity demanded is widgetsStep by Step Solution
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