Consider the Bangladeshi market for oranges. absence of international trade. Then, use the green point (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple point (diamond symbol) to shade the area representing producer surplus in equilibrium. Note: Select and drag a fill area point from the palette to the graph. To fill in regions on the graph, merely drop the fill area point on the desired region. Based on the previous graph, total surplus in the absence of international trade is The following graph shows the same domestic demand and supply curves for oranges in Bangladesh. Suppose that the Bangladeshi government changes its international trade policy to allow the free trade of oranges. The horizontal black line ( PW) represents the world per ton. Assume that Bangladesh's entry into the world market for oranges has no effect on the world price and there are the or transaction costs associated with international trade in oranges. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. When Bangladesh allows free trade of oranges, the price of a ton of oranges in Bangladesh will be $700. At this price, tons of oranges will be demanded in Bangladesh, and tons will be supplied by domestic suppliers. Therefore, Bangladesh will import tons of oranges. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. When Bangladesh allows free trade, the country's consumer surplus by , and producer surplus by . So, the net effect of international trade on Bangladesh's total surplus is a of Consider the Bangladeshi market for oranges. absence of international trade. Then, use the green point (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple point (diamond symbol) to shade the area representing producer surplus in equilibrium. Note: Select and drag a fill area point from the palette to the graph. To fill in regions on the graph, merely drop the fill area point on the desired region. Based on the previous graph, total surplus in the absence of international trade is The following graph shows the same domestic demand and supply curves for oranges in Bangladesh. Suppose that the Bangladeshi government changes its international trade policy to allow the free trade of oranges. The horizontal black line ( PW) represents the world per ton. Assume that Bangladesh's entry into the world market for oranges has no effect on the world price and there are the or transaction costs associated with international trade in oranges. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. When Bangladesh allows free trade of oranges, the price of a ton of oranges in Bangladesh will be $700. At this price, tons of oranges will be demanded in Bangladesh, and tons will be supplied by domestic suppliers. Therefore, Bangladesh will import tons of oranges. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. When Bangladesh allows free trade, the country's consumer surplus by , and producer surplus by . So, the net effect of international trade on Bangladesh's total surplus is a of
