Question

Question 5 (29 pts) a. 2ps) The Land of Three Lords is a termitory occupied by Palisarmne Palisame stictly forbids trading of any kind in the Land of Three Lords. In equilibrium, without trading, a citizen of the Land of Three Lords domestic market produces 1500 spheres to sell at that price can buy an armillary sphere for 500 cobbles (their unit of currency); the ps) Graph the market for amillay spheres in the Land of Three Lords, labeling the axes and plotting the equilibrium point (Wat to draw your supply and demand schedules untl reading the information in part I II, 16 pts) Brave combatants depose of the Palisarne occupiers. The Land of Three Lords open up rading with other territories, including Itzilan and Maedwe. The wold price for armillary spheres is 500 cobbles. The quantity consumed at home falls to 1400 and the quantity produced rises to 2000. (b) (3 pts) On your graph above, add in the supply and demand schedules using this new information. Show all relevant numbers. (The demand curve crosses the y-axis at 2000 cobbles and the supply curve crosses the y-axis at 200 cobbles) (e) (l p) Does the Land of Three Lords import or export armillary spheres? How many units? (d) (4 pts) Calculate the consumer surplus and producer surplus AFTER trade begins