is this correct? only answer IF YOU KNOW 5. Welfare effects of free trade in an

Question

is this correct? only answer IF YOU KNOW

5. Welfare effects of free trade in an exporting country Consider the New Zealand market for lemons. The folowing graph shows the domestic demand and domestic supply curves for lemons in New Zealand. Suppose New Zealand's gavernment currently does not allow the international trade in lemons Use the black point (plus symbal) to indicate the equilibrium price of a ton of lemons and the equinbrium quantity of lemons in New Zealand in the absence of international trade. Then, use the green point (triangle symbol) to shade the area representing consuner surplus in equilibrium. Finally use the purple point (diamond symbol) to shade the area representing producer surplus in equiibrium 1010 Domestic Demand Domestice Supply 940 870 800 No Trade Equilb esumer Surplus 660 590

Explanation / Answer

yes the regions marked by you are correct

consumer surplus is the extra benifit that a consumer derives even after paying for the product and is represented by the area under the demand curve and above the price line

producer surplus is the extra amount that each producer gets even if he is ready to supply at a lower price. it is represented by the area above supply curve and below price line

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