Suppose home country is a large country. There are two countries: home and foreign, both producing some agricultural goods. H and F stand for home and foreign, and both countries' demand and supply functions are given as follows: Home supply S^H=0.5p^H-40, Home demand D^H= -0.5p^H+120; Foreign supply S^F=0.5p^F-10,Foreign demand D^F= -0.5p^F+70. When both countries are assumed to be closed economy, how much is the equilibrium price in the foreign country?

• A. 200
• B. 120
• C. 100
• D. 160
• E. 80

When both countries are assumed to be closed economy, how much is the consumer surplus in the home country?

• A. 1800
• B. 1600
• C. 1200
• D. 2000
• E. 1000

Please calculate the equilibrium price under free trade (Hint: In equilibrium, p^H will be equal to p^F)