Figure 9-10.The figure applies to Mexico and the good is rifles.
-Refer to Figure 9-10.The area bounded by the points (Q₀,P₀) , (Q₂,P₁) ,and (Q₁,P₁) represents

Question

Figure 9-10.The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10.The area bounded by the points (Q₀,P₀), (Q₂,P₁),and (Q₁,P₁)represents

Quizplus · Accepted Answer

The area bounded by the points (Q0,P0), (Q2,P1),and (Q1,P1)represents Mexico's gain in total surplus due to trade. This is because the area above the world price line (P0) and below the domestic price line (P1) represents the gain in consumer surplus, while the area below the world price line and above the domestic price line represents the loss in producer surplus. The net gain in total surplus is the difference between these two areas, which is represented by the area bounded by the points (Q0,P0), (Q2,P1),and (Q1,P1).