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4. Winners and losers from free trade Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $22. Suppose that the world price for a meeker is $21. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market. If Meekertown allows free trade, then it will meekers. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertownian consumers are worse off under free trade than they were before. Meekertownian producers were worse off without free trade than they are with it. о о True or False: 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. O True O False

4. Winners and losers from free trade Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $22. Suppose that the world price for a meeker is $21. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market. If Meekertown allows free trade, then it will meekers. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertownian consumers are worse off under free trade than they were before. Meekertownian producers were worse off without free trade than they are with it. о о True or False: 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. O True O False

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 1QCMC
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4. Winners and losers from free trade Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $22. Suppose that the world price for a meeker is $21. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market. If Meekertown allows free trade, then it will meekers. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertownian consumers are worse off under free trade than they were before. Meekertownian producers were worse off without free trade than they are with it. о о True or False: 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. O True O False
Transcribed Image Text:4. Winners and losers from free trade Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $22. Suppose that the world price for a meeker is $21. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market. If Meekertown allows free trade, then it will meekers. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertownian consumers are worse off under free trade than they were before. Meekertownian producers were worse off without free trade than they are with it. о о True or False: 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. O True O False
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