International Trade: End of Chapter Problem
In the figure, consider triangles B and C. One of these could be labeled "Workers and machines who could be better used in another sector of the economy," whereas the other could be labeled "Consumers who have to pay more than necessary for their product." Which is which?
a. Triangle B reflects "Consumers who have to pay more than necessary for their product."
b. Triangle C reflects "Workers and machines who could be better used in another sector of the economy."
Price per pound (cents)
Domestic demand
Domestic supply
Tariff equilibrium
U.S. willingness to pay
U.S. costs
Lost gains from trade or deadweight loss
Wasted resources
Free trade equilibrium
World price
World costs
World supply
Quantity (billions of pounds)
