Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price.
Figure 4.1.Import Tariff Levied by a "Small" Country

-Consider Figure 4.1.In the absence of trade,Mexico's producer surplus and consumer surplus respectively equal:
A) $120,$240
B) $180,$180
C) $180,$320
D) $240,$240

Question

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price.
Figure 4.1.Import Tariff Levied by a "Small" Country
 
-Consider Figure 4.1.In the absence of trade,Mexico's producer surplus and consumer surplus respectively equal:
A) $120,$240 
B) $180,$180 
C) $180,$320 
D) $240,$240

Quizplus · Accepted Answer

In the absence of trade, the equilibrium price and quantity are $6 and 20, respectively. Producer surplus can be calculated as the area above the supply curve and below the equilibrium price, which is ½(6-2)(20) = $80. Consumer surplus can be calculated as the area below the demand curve and above the equilibrium price, which is ½(10-6)(20) = $80. So, the total surplus is $80+$80=$160, which is split equally between producers and consumers. Therefore, producer surplus and consumer surplus are both $80=$180/2=$90. So, the correct answer is B.

Figure 41 Illustrates the Demand and Supply Schedules for Pocket Calculators