The graph below represents the market for alfalfa. The ...

[madam-professor]

The graph below represents the market for alfalfa. The equilibrium price is 7.00 per bushel, but the market price is 9.00 per bushel.
 
  Identify the areas representing consumer surplus, producer surplus, and deadweight loss at the equilibrium price of 7.00 and at the market price of 9.00.

Question 2

Refer to Table 2-5. Finland has a comparative advantage in the production of
 
  A) lumber. B) neither product. C) cell phones. D) both products.

[wilsonbho]

Answer to Question 1

At the equilibrium price of 7.00:
Consumer surplus is represented by area A + B + C.
Producer surplus is represented by area D + E.
There is no deadweight loss.

At the market price of 9.00:
Consumer surplus is represented by area A.
Producer surplus is represented by area B + D.
Deadweight loss is represented by area C + E.

Answer to Question 2

C

[madam-professor]

Thank you

[wilsonbho]

No problemo