Use the following to answer questions :
Figure: The Market for Oranges in South Africa
-(Figure: The Market for Oranges in South Africa) Look at the figure The Market for Oranges in South Africa. In autarky, the price of oranges in South Africa is P₁. When the economy is opened to trade, the price falls to P_W and the change in total surplus is area:

Question

Use the following to answer questions :
Figure: The Market for Oranges in South Africa

-(Figure: The Market for Oranges in South Africa) Look at the figure The Market for Oranges in South Africa. In autarky, the price of oranges in South Africa is P₁. When the economy is opened to trade, the price falls to P_W and the change in total surplus is area:

Quizplus · Accepted Answer

Opening the economy to trade leads to an increase in consumer surplus (area P) and a decrease in producer surplus (area O). However, there is no change in deadweight loss (area M + N) or government revenue (area Q). Therefore, the change in total surplus is only equal to the increase in consumer surplus (area P), making the correct choice B.

Use the Following to Answer Questions