Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly

labeled diagram must have all axes and curves clearly labeled and must show directional changes. I

the question prompts you to "Calculate," you must show how you arrived at your final answer.

In the country of Alpha, TT-shirts are sold domestically in a competitive market and the equilibrium price

is $10, and the equilibrium quantity is 100.

(a) Draw a correctly labeled demand and supply graph for the domestic TT-shirt market in Alpha.

Plot the numbers on the graph.

(b) Assume the world price of TT shirts is $6, and Alpha engages in international trade.

(i) Will Alpha be an exporter or importer of TT shirts? Explain.

(ii) On your graph in part (a), indicate the domestic quantity demanded of TT shirts at the world price

and label it QDQD

(iii) On your graph in part (a), indicate the change in the consumer surplus, shaded completely.

(c) Suppose the government of Alpha imposes a tariff of $2 on TT shirts. On your graph in part (a),

indicate the new domestic quantity supplied of TT shirts as a result of the tariff and label it QSQS.