Keeping in mind that the area of a triangle is (length x width/2) Find the numerical value for each of the items listed below the graph.

  1. If this is a closed economy what will be the price and quantity?
    Answer: Price is $7 and the quantity is 6

  2. If this is a closed economy what will be the value of consumer surplus?
    Answer: 9  or  (6 x 3)/ 2 

  3. If this is a closed economy what will be the value of producer surplus?
    Answer: 21   or (7 x 6)/2

  4. If the world price is $3, and this is an open economy, what will domestic producers make?
    Answer: 2

  5. If the world price is $3, and this is an open economy, how much will domestic consumers buy?
    Answer: 10

  6. If the world price is $3, and this is an open economy, how much will have to be imported to meet consumer demand?
    Answer: 8 or (10 -2)

  7. If the world price is $3, and this is an open economy, what will be the numerical value of consumer surplus?
    Answer: 35 or (7 x 10)/2

  8. If the world price is $3, and this is an open economy, what will be the numerical value of producer surplus?
    Answer: 3 or (3 x 2)/2

  9. If the world price is $3, and this is an open economy, what will be the revenue of foreign producers?
    Answer: $24 ($3 x 8)

  10. If the current world price is $3, and the government places a $2 tariff on the good, how many products will domestic consumers buy?
    Answer: 8

  11. If the current world price is $3, and the government places a $2 tariff on the good, how many products will domestic producers make?
    Answer: 4

  12. If the current world price is $3, and the government places a $2 tariff on the good, how many products will have to be imported to meet domestic demand?
    Answer: 4 or (8-4)

  13. If the current world price is $3, and the government places a $2 tariff on the good, what is the numerical value of consumer surplus?
    Answer: 20 or (5x8)/2

  14. If the current world price is $3, and the government places a $2 tariff on the good, what is the numerical value of producer surplus?
    Answer: 10 or (5 x 4)/2

  15. If the current world price is $3, and the government places a $2 tariff on the good, how much tax revenue will the government collect from the tariff?
    Answer: $8 or ($2 for each of the 4 imported goods)