Economics 9708 · AS & A Level · Protectionism

Protectionism — practice question

On the diagram, D and S show the domestic demand and supply curves for a product. Sw shows world supply of the product at the world price of Pw. The product’s original domestic market equilibrium is at E1. If foreign trade were to be prohibited entirely, the domestic market equilibrium would move to E2. What would be the fall in consumer surplus if all foreign trade were prohibited?

  • APwXE1
  • BPwYE2E1
  • CYXE2
  • DZYE2

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