Use the following to answer questions:
Figure: Foreign Trade 2
-(Figure: Foreign Trade 2) Refer to the figure. What is the dollar value of wasted resources as a result of prohibiting trade in this market?
A) $30,000
B) $5,000
C) $2,500
D) $22,500

Question

Use the following to answer questions:
Figure: Foreign Trade 2 
-(Figure: Foreign Trade 2) Refer to the figure. What is the dollar value of wasted resources as a result of prohibiting trade in this market?
A) $30,000 
B) $5,000 
C) $2,500 
D) $22,500

Quizplus · Accepted Answer

The dollar value of wasted resources is calculated as the area of the deadweight loss triangle, which is typically the area between the supply and demand curves that is not realized due to the prohibition of trade. In this case, the correct calculation leads to $2,500.

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