Please answer all parts and show clearly how the graph is supposed to look like. The choices for the drop down questions on the bottom are increases or decreases.

1. Welfare effects of free trade in an exporting country Consider the Kenyan market for lemons. The following graph shows the domestic demand and domestic supply curves for lemons in Kenya. Suppose Kenya's government currently does not allow international trade in lemons. Use the black paint (plus symbol) to indicate the equilibrium price of a ton of lemons and the equilibrium quantity of lemons in Kenya in the absence of international trade. Then, use the green triangle ( triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple triangle (diamond symbol) to shade the area representing producer surplus in equilibrium. 1100 Domestic Demand Domestic Supply "I- 1000 ' 900 EqUIIIbnum WIlhout Trade A 800 h C .9 3 700 Consumer Surplus D. a g 600 0 El 8 50 Producer Surplus E D- 400 300 200 100 0 35 70 105 140 175 210 245 280 315 350 QUANTITY (Tons of lemons) 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 lemons in Kenya. Suppose that the Kenyan government changes its international trade policy to allow free trade in lemons. The horizontal black line (PW) represents the world price of lemons at $800 per ton. Assume that Kenya's entry into the world market for lemons has no effect on the world price and there are no transportation or transaction costs associated with international trade in lemons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the green triangle (triangle symbol) to shade consumer surplus, and then use the purple triangle (diamond symbol) to shade producer surplus. (? 1100 - Domestic Demand Domestic Supply 1000 900 Consumer Surplus 300 PW 700 Producer Surplus PRICE (Dollars per ton) 600 500 400 300 200 100 0 35 70 105 140 175 210 245 280 315 350 QUANTITY (Tons of lemons) When Kenya allows free trade of lemons, the price of a ton of lemons in Kenya will be $800. At this price, tons of lemons will be demanded in Kenya, and tons will be supplied by domestic suppliers. Therefore, Kenya will export tons of lemons. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. Without Free Trade With Free Trade (Dollars) (Dollars) Consumer Surplus Producer Surplus When Kenya allows free trade, the country's consumer surplus by $ , and producer surplus by So, the net effect of international trade on Kenya's total surplus is a * of$