Figure 9 Supply 16. Refer to Figure 9-4 What s consumer surphus in this market before trade? h AtB c. A+B+D d.? 17. When Ford and General Motors import automobile parts from Mexico at prices below those tbey must pay in Canada, who is worse of? a Workers who assemble Ford and General Motors vehicles become worse off. b. Canadian cousuners, taken as a group, become worse off. c. Mexican consmers, taken as a group, hecome warse aff d Canadiancoies dhat mafactureautalparts became woarse of Figure 9-6 18. Refer to Figure 9.6. If this rountry chonses to trade, what would be the prire of wagpns in this country and hwmay wouldbe sld duestially? a. S5 and 40 waons would be sold domestically b. S5 nd wagons c. $5 and 90 wagons would be sold domestically d SR and 70 wagons wold he sold domestically 50 wagons would be sold domestically 0-7 19. Rcfer to Figure 9. If trade in sbocs is allowed in Korca, what will happen to comsumer surplus and producer surplus a. Cosue suplus will increase, and produce surplus will decrease. b Consumer sarphswll decrease, and procucer surplus will increase. c. Producer surplus aud consumer surplus will increase. d. Producer sueplus and consumer surplus will be unaffocted. Figure9-1I 10 200 0 40500 00 20. Relei to Figue 9-11. Whal will happen in this inaket with free trade? a? The domestic price will equal the world price. b. Canations will ba sold al $3 inthis maket. c? There wll be a shortage of400 carnations in this market d There will be a surphas af 400 camations in this market
16. Before trade the market produces at the equilibrium where demand curve intersects with the supply curve.
Comsumer surplus ( the area below demand curve and above market price) = area ( A + B)
Answer- option B
17. When ford and general motor import automobile parts from mexico at a lower price that they pay in Canada, then canadian companies that manufactures those parts become worse off because They now get the world price and they are bound to sell less and get lower price than market equilibrium price.
Answer- option D
18. If this country chooses to trade at world price = $5, at this price, domestic supply will be 40 wagons.
Answer- option A
19. Initially before trade, korea produces at equilibrium Where demand and supply intersect. But after trade it imports shoes at world price which is less than equilibrium price. With decrease in market price from equilibrium to world price, consumer surplus(the area below demand curve and above the market price) in korea increases and producers surplus (the area below market price and above the supply curve) decreases.
Answer- option A
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