Consider a small country that exports good R . Some of the total quantity of R that
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Question:
Consider a small country that exports good R. Some of the total quantity of R that is domestically produced is consumed by domestic consumers and the rest of it is exported. Then suppose that the government prohibits (bans) the exporting of good R. Show the effects of this using a carefully labeled demand and supply diagram. On your diagram, shade-in the area that represents the change in domestic consumer surplus caused by the prohibition of exports of good R (please do not shade-in any other areas). Then provide an explanation for the change in consumer surplus.
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