(Solved): Use the black point (plus symbol) to denote the equilibrium price of one ton of pears and the equi ...

Use the black point (plus symbol) to denote the equilibrium price of one ton of pears and the equilibrium quantity of pears in Bolivia without international trade. Next, use the green triangle (triangle symbol) to shade in the area that represents consumer surplus in equilibrium. Finally, use the purple triangle (diamond symbol) to shade in the area that represents producer surplus in equilibrium. Based on the information from the previous graph, absent international trade total surplus is The following graph shows the same domestic supply and demand curves for pears in Bolivia. Now, suppose that the Bolivian government changes its stance on international trade, deciding to allow free trade in pears. The horizontal black line $\left(P_W\right)$ represents the world price of pears at $\$350$ per ton. Assume that Bolivia's entry into the world market for pears has no effect on the world price and there are no transportation or transaction costs associated with international trade in pears. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triangle (diamond symbol) to shade in the area representing producer surplus. When Bolivia adjusts its trade policy to allow free trade of pears, the price of one ton of pears in Bolivia becomes $\$350$. At this price, tons of pears will be demanded in Bolivia, and tons will be supplied by domestic suppliers. Therefore, Bolivia will export tons of pears. When Bolivia allows free trade, the country's producer surplus by , and consumer surplus by . Therefore, the net effect of allowing international trade on Bolivia's total surplus is a of