Scenario 9-2
• For a small country called Boxland,the equation of the domestic demand curve for
cardboard is ,
where represents the domestic quantity of cardboard demanded,in tons,and represents the price of a ton of cardboard.
• For Boxland,the equation of the domestic supply curve for cardboard is ,
where represents the domestic quantity of cardboard supplied,in tons,and again
represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $60.Then,relative to the no-trade situation,international trade in cardboard produces which of the following results for Boxland?
A)It decreases consumer surplus,increases producer surplus,and decreases total surplus.
B)It decreases consumer surplus,increases producer surplus,and increases total surplus.
C)It decreases consumer surplus,decreases producer surplus,and decreases total surplus.
D)It increases consumer surplus,increases producer surplus,and increases total surplus.

Question

Scenario 9-2
• For a small country called Boxland,the equation of the domestic demand curve for
cardboard is  ,
where  represents the domestic quantity of cardboard demanded,in tons,and  represents the price of a ton of cardboard.
• For Boxland,the equation of the domestic supply curve for cardboard is  ,
where  represents the domestic quantity of cardboard supplied,in tons,and  again
represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $60.Then,relative to the no-trade situation,international trade in cardboard produces which of the following results for Boxland?
A)It decreases consumer surplus,increases producer surplus,and decreases total surplus. 
B)It decreases consumer surplus,increases producer surplus,and increases total surplus. 
C)It decreases consumer surplus,decreases producer surplus,and decreases total surplus. 
D)It increases consumer surplus,increases producer surplus,and increases total surplus.

Quizplus · Accepted Answer

When the world price of cardboard is $60, it is lower than the domestic equilibrium price in Boxland, so Boxland will export cardboard.

- Consumer surplus will decrease because domestic consumers will have to pay a higher price than the world price. 
- Producer surplus will increase because domestic producers will receive a higher price than they would in the absence of trade. 
- Total surplus will increase since the gain in producer surplus exceeds the loss in consumer surplus.

Therefore, international trade in cardboard increases both producer surplus and total surplus while decreasing consumer surplus. Choice B is the correct answer.

Scenario 9-2 • for a Small Country Called Boxland,the Equation of the of the Domestic