MindTap Aplia Homework Attemptsx Do No Hars3 2. Winners and losers from free tra
ID: 1226481 • Letter: M
Question
MindTap Aplia Homework Attemptsx Do No Hars3 2. Winners and losers from free trade Consider the market for meekers in the imaginary economy of Meckertown. In the absence of international trade, the domestic price of a mecker s Suppose that the world price for a meeker is $30 Acsume thot Meekertown is too smuall to irfluence the world price for meckers once they the international market If Meekertown allows free treade, then it will Given curent economic conditions im Meekertown, complete the followming table by indicating whether each of the statements is true or fabe meekers. True False Statement Meekertownian consumers are better off under free trade than they were before. OO Heekertownian producers are worse off under free trade than they were before.O O True or False: When a country is too small to affect the world price, allowing for free trade will never increase tetal surplus in that country, regardless of whether it imports or exports as a result of international trade. O True O FelseExplanation / Answer
If meekertown allows free trade, then it will export meekers.
Explanation:- World Price of meeker is greater than the domestic price, thus, if the free trade is allowed then the economy will export meekers.
True / False
1) Meekertown consumers are better off under free trade than they were before.
Answer:- False.
2) Meekertown producers are worse off under free trade than they were before.
Answer:- False.
Explanation:- If the free tade is allowed in economy and the economy start exporting the goods, then the domestic consumers of the goods are worse off under free trade and domestic producers of the goods are better off under free trade.
3) When a country is too small to affect the world price, allowing for free trade will never increase total surplus in that country, regardless of whether it imports or exports as a result of international trade.
Answer:- False.
Explanation:- If the free tade is allowed in economy and the economy start exporting the goods, then the producer surplus in the economy will rise and Consumer surplus will decline in the economy. However, the rise in producer surplus is more than that of falling consumer surplus. Thus, Overall total surplus will increase.