it couldnt fit in one picture: e. Suppose that this economy decides to open this market to trade. Analyze what happens in this market if the world price of pencils is $30 per pencil. In your answer identify the level of imports or exports, the new level of consumer surplus, the new level of producer surplus, the new level of total surplus, and identify the distributional consequences of opening this market to trade. f. Suppose that this market for pencils is opened to world trade and the world price is $30 per pencil. Furthermore, suppose that the government of this economy decides to implement a tariff so that the price of pencils in the small open economy is equal to $35 per pencil. Analyze the effect of this tariff on imports or exports, consumer surplus, producer surplus, total surplus, government tariff revenue and deadweight loss relative to the results you got when the market was open to trade and there was no tariff.

S&D: International Trade: Tariffs and Quotas 3. (Moved from Homework #2) Suppose that a small, closed economy manufactures pencils. There are five domestic manufacturers of these pencils and they have identical supply curves. Suppose the supply curve for a single manufacturer of these pencils is given by the equation P = Q + 20. Additionally you know that the domestic demand for pencils in this small, closed economy is given by the equation P = 50 (U10)Q. a. What is the domestic supply curve for pencils in this economy? 13. Given the domestic supply curve and the domestic demand curve, what is the equilibrium price and quantity of pencils in this economy if the economy is closed? c. Calculate the value of consumer surplus, producer surplus, and total surplus if the domestic economy is a closed economy with regard to the pencil market. d. Suppose that this economy decides to open this market to trade. Analyze what happens in this market if the world price of pencils is $45 per pencil. In your answer identify the level of imports or exports, the new level of consumer surplus, the new level of producer surplus, the new level of total surplus, and identify the distributional consequences of opening this market to trade