The US orange market is characterized by an upward sloping supply curve and a downward sloping demand curve.

a.Draw a graph depicting the equilibrium in this market without international trade. Assume that the equilibrium price is $4/lb, and the equilibrium

quantity is 2 million lbs. Label your no-trade equilibrium as point A. Suppose that the US orange market opens to trade, and that foreign orange growers are willing to supply an unlimited quantity at a price, Pw=$2/lb, below the US no-trade price. Label this equilibrium as point B, identifying the new equilibrium price and quantity. Determine the changes to consumer surplus domestic producer surplus, and government revenue.

b. After opening up the US orange market to trade, a bunch of high-priced lobbyists push for a $.50/lb tariff on imported oranges. Assume that they are successful, and drawing a new graph, continue to label your free-trade equilibrium as point B (without the tariff), and label the post-tarriff equilibrium as point C. Which group hired the lobbyists, consumers or domestic producers of oranges? How does the amount of imported oranges, consumer surplus, and producer surplus change?