Answer the following statements true (T) or false (F)
1.Consider Figure 5.5. With free trade, Mexican producer surplus equals $2,450 and Mexican consumer surplus equals $200.
2.Consider Figure 5.5. Suppose that the governments of Mexico and Japan negotiate a voluntary export agreement in which Japanese TV exports to Mexico are limited to 8 units. Under the quota, the price of TVs in Mexico equals $250 while Mexicans produce 10 TVs and purchase 18 TVs.
3.Consider Figure 5.5. Compared to free trade, the Japanese export quota leads to an increase in Mexican consumer surplus of $3,150.
4.Consider Figure 5.5. Compared to free trade, the Japanese export quota leads to an increase in Mexican producer surplus of $1,050.
5.Consider Figure 5.5. The deadweight welfare loss to Mexico, as a result of the Japanese export quota, totals $1,200.
1.False
2.True
3.False
4.True
5.False
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