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consumer surplus

producer surplus

MPL
private-owned line

APL
public-owned line

hire until line = wage
employment

(each worker MPL - wage) add total
Private-owned surplus

(APL*labor)-(wage*labor)
Public-owned surplus

consumer surplus
private-owned surplus

0
public-owned surplus

(old - new Q, up to MCP) / MCs MCp height difference
pollution tax producers

(price MCs = MB - price MCp = MB) / ( MCs MCp height difference )
pollution tax consumers

20/5 = 4 TVs
what is the opportunity cost of making a car? (Country 1)

25/50 = 0.5 cars
what is the opportunity cost of making a TV? (Country 2)

400 600 750 250
against atuarky
1: 40%, 60%
2: 75%, 25%

atuarky / production
Production and consumption (expected w atuarky)

against atuarky / production
Production and consumption (reality)

1: expected - actual or actual - expected
2: multiply by 3, flip sign
Trade (depends on comp adv)

production (reality) - trade
Consumption

consumption (after) - production and consumption (before)
Gains from trade

slope
Atuarky price

dot on the solid line
combination of production in autarky

dot on the solid line
combination of consumption in autarky

intercepts depending on specialization
combination of production in trade

flatter, manufacturing
steeper, agricultural
How do you determine specialization?

black dot NOT on solid line, marked with numbers
combination of consumption in trade

free trade price

tariff price

difference between free trade and tariff price
tariff imposed

tariff imposed*(quantity difference)
import revenues collected by the government

((after-before)/before)*100
effective rate of production
EX-IM+investment income-debt+net remittance
Current account
FDI+FPI-resident capital outflow
Capital account