Solved: The following tables show the domestic supply and

demand schedules
The following tables show the domestic supply and demand schedules

The following tables show the domestic supply and demand schedules for bushels of flaxseed
(used as an edible oil and a nutrition supplement) in the United States and Kazakhstan, with
prices measured in U.S. dollars and quantities measured in millions of bushels.

a. In which country is flaxseed cheaper to produce? In which country do the consumers of

flaxseed value it more?

b. Complete the bottom table by describing each nation’s willingness to import or export
flaxseed at each price. One row has been done for you as an example.

c. If the United States and Kazakhstan entered into free trade with only one another, what would
be the price of flaxseed, and what quantity of flaxseed would be traded?

d. For each of the following four constituent groups, determine whether free trade between the
United States and Kazakhstan would help or harm the members of that group. Calculate the
change in consumer or producer surplus in each country as necessary to support your claim.

i. The buyers of flaxseed in Kazakhstan

ii. The sellers of flaxseed in Kazakhstan

iii. The buyers of flaxseed in the United States

iv. The sellers of flaxseed in the United States

e. Suppose the sellers of flaxseed in the importing country successfully lobby for protection in
the form of a $4 tariff per bushel of flaxseed. Describe the impact of this tariff on flaxseed trade
and on the consumer and producer surpluses you calculated in part d. How much deadweight
loss does this tariff generate?

The following tables show the domestic supply and demand schedules

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