Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer.

In the country of Alpha,T

T-shirts are sold domestically in a competitive market, the equilibrium price is $10, and the equilibrium quantity is 100.

(a) Draw a correctly labeled demand and supply graph for the domesticT

T-shirt market in Alpha. Plot the numbers on the graph.

(b) Assume the world price ofT

T-shirts is $6, and Alpha engages in international trade.

(i) Will Alpha be an exporter or importer ofT

T-shirts? Explain.

(ii) On your graph in part (a), indicate the domestic quantity demanded ofT

T-shirts at the world price and label itQ

D

QD.

(iii) On your graph in part (a), indicate thechangein the consumer surplus, shaded completely.

(c) Suppose the government of Alpha imposes a tariff of $2 onT

T-shirts. On your graph in part (a), indicate the new domestic quantity supplied ofT

T-shirts as a result of the tariff and label itQS