3. Welfare effects of a tariff in a small country Suppose Venezuela is open to...
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3. Welfare effects of a tariff in a small country Suppose Venezuela is open to free trade in the world market for soybeans. Because of Venezuela's small size, the demand for and supply of soybeans in Venezuela do not affect the world price. The following graph shows the domestic soybeans market in Venezuela. The world price of soybeans is P-$400 per ton On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangie (diamond symbols) to shade the area representing producer surplus (PS)
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