-The above figure shows the market for rice in Japan.S_Domestic represents the domestic supply curve,and S_world represents the world supply curve.If imported rice is banned,the loss in social welfare is

Question

-The above figure shows the market for rice in Japan.S<sub>Domestic</sub> represents the domestic supply curve,and S<sub>world</sub> represents the world supply curve.If imported rice is banned,the loss in social welfare is A) a + b + c + d + i + j. B) a. C) c + e. D) a + b + c + d.

Quizplus · Accepted Answer

When imported rice is banned, the domestic market loses the benefits of lower prices and greater supply provided by the world market. The loss in social welfare includes the areas representing consumer surplus (a + b + c + d) that would have been gained from importing rice at lower prices. Areas i and j represent producer surplus changes and are not part of the social welfare loss due to the ban on imports.

-The Above Figure Shows the Market for Rice in Japan