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Below, you are provided with the demand and supply curves for pizzas. You will use this information to identify whether the country imports or exports pizza. You will also determine whether producers and/or consumers win by engaging in international trade. Part 1: Suppose that the country depicted above does not trade pizzas. What is the equilibrium price of a pizza? How many pizzas are bought and sold? Part 2: Suppose that the country depicted above does not trade pizzas. Calculate the amount of consumer surplus that results in this market. Part 3: Suppose that the country depicted above does not trade pizzas. Calculate the amount of producer surplus that results in this market. Part 4: Suppose that the world price of a pizza is $12. Does this country import or export pizzas? How many? Part 5: Suppose that the world price of a pizza is $12, and that this country engages in trade. Calculate the amount of consumer surplus that results in this market. Part 6: Suppose that the world price of a pizza is $12, and that this country engages in trade. Calculate the amount of producer surplus that results in this market. Part 7: Suppose that the world price of a pizza is $12, and that this country engages in trade. Calculate the "gains from trade." That is, by how much does total surplus increase when this country trades pizza. Part 8: Complete the statement below. If the world price of a good or service is below the equilibrium price of that good or service, the country being analyzed will (import, export) the good or service. As a result, consumer surplus (increases, decreases), and producer surplus (increases, decreases). Total surplus (increases, decreases)

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