Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 9 - Part III - Application: International Trade - Questions for Review - Page 189: 3

Answer

Please see the graph.

Work Step by Step

Before trading, consumer surplus is area $A$, and producer surplus is the sum of areas $B+C$. With trade, consumer surplus is now $A+B+D$, and producer surplus is $C$. Prior to trade, total surplus was $A+B+C$. With trade, total surplus is $A+B+C+D$. Thus, the change in total surplus is $D$.
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