Figure: Consumption with and without Trade 
Refer to the figure. Suppose this diagram represents the market for sugar in the United States.
a. What is the equilibrium price of sugar before trade?
b. What is the equilibrium quantity of sugar before trade?
c. What is the price of sugar after trade is allowed?
d. What is the quantity of sugar imported after trade is allowed?
e. What is the amount of consumer surplus before trade?
f. By how much does consumer surplus increase after trade?
g. What is the amount of producer surplus before trade?
h. What is the amount of producer surplus after trade?
Correct Answer:
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b. 20 billion poun...
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