Answer
a) Please see the first graph and table.
b) The price of wine increases due to decreased supply. Consumers are made worse off, producers are made better off, and Canada overall is worse off.
Work Step by Step
a) Since the world price is below the price for Canada, we use the world price for the price of wine in Canada. Consumer surplus is the sum of areas $A+B+C+E+F$, and producer surplus is area $D$.
b) On the second graph, the new price of wine is $P_{W2}$, the orange line. Consumer surplus shrinks to $A+B+E$, while producer surplus increases to $C+D$. Area $F$ is lost surplus.
