Figure 19-1
Figure 19-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 19-1.Under autarky,the consumer surplus is

Question

Figure 19-1
  Figure 19-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 19-1.Under autarky,the consumer surplus is

Quizplus · Accepted Answer

Under autarky (no trade), the equilibrium price is $15 and the equilibrium quantity is 20 million pairs. The area below the demand curve and above the equilibrium price represents consumer surplus, which is calculated as follows:

Consumer surplus = ½ × (20 million × $15) = $150 million

The area below the equilibrium price and above the supply curve represents producer surplus, which is calculated as follows:

Producer surplus = ½ × (20 million × $5) = $50 million

Therefore, the total surplus under autarky is $200 million ($150 million + $50 million).

None of the other answer choices are correct, as they appear to be referencing a different calculation or a calculation that includes trade with another country.

Figure 19-1 Figure 19-1 Shows the U.S. Demand and Supply