Macroeconomics 11th Edition by Michael Parkin

Exercise 3

Use the information on the U.S. wholesale market for roses in the Problem to
a. Explain who gains and who loses from free international trade in roses compared to a situation in which Americans buy only roses grown in the United States.
b. Draw a graph to illustrate the gains and losses from free trade.
c. Calculate the gain from international trade.
Wholesalers of roses (the firms that supply your local flower shop with roses for Valentine's Day) buy and sell roses in containers that hold 120 stems. The table provides information about the wholesale market for roses in the United States. The demand schedule is the wholesalers' demand and the supply schedule is the U.S. rose growers' supply.
Wholesalers can buy roses at auction in Aalsmeer, Holland, for $125 per container.