2. Winners and losers from free trade Consider the imaginary economy of Meekerton and the market for meekies, a hypothetical good. Without international trade the domestic price of meekies is $21. Suppose that the world price of meekies is $33. Assume that if it were to enter the international market for meekies, Meekerton is tom small to influence the world price. If Meekerton decides to participate in free trade, then it will, meekies. Given current economic conditions in Meekerton, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertonian producers were better off without free trade than they are with it. Meekertonian consumers are better off under free trade than they were before. ° о True or False: When a nation is too small to affect world prices, allowing free trade will have a non-negative effect on total surplus in that country, regardless of whether it imports or exports as a result of international trade. O True

P Domestic Market for Good X Pi P₂ & P Pw Po 0 0 Q₁ Q2 Q Consider the domestic market for Good X in Country A, graphed above. Po-$5, P1-$25, P2-$20, P=$15, Pw-$10, Q1-40, Q-80, Q2-120. The world market outside country A observes a price Pw for Good X. When international trade is allowed, what is the quantity exchanged of Good X in Country A?

Help

2. Winners and losers from free trade Consider the imaginary economy of Meekerton and the market for meekies, a hypothetical good. Without international trade the domestic price of meekies is $38. Suppose that the world price of meekies is $36. Assume that if it were to enter the international market for meekies, Meekerton is too small to influence the world price. If Meekerton decides to participate in free trade, then it will Given current economic conditions in Meekerton, complete the following table by indicating whether each of the statements is true or false. Statement meekies. Meekertonian producers were worse off without free trade than they are with it. Meekertonian consumers were better off without free trade than they are with it. True False True True or False: When a nation is too small to affect world prices, allowing free trade will sometimes decrease total surplus in that country, regardless of whether it imports or exports as a result of international trade. False

.

12. If the free trade price is lIP and this country imposes a trade tariff of $3, what will be the resulting net welfare loss to the economy? a)$3 b)$27 C)$13.5 d)$40.5 e)$9 13. if the free trade price is IP and this country imposes an import quota of 6 units, what will be the welfare loss to this economy?    a)$3 b)$27 c)$13.5 d)$40.5 e)$18

a. Table 1 represents the demand and supply schedules of medicinal products for Belgium, a small nation that is unable to affect the world price. i. Draw the demand and supply schedules of medicinal products for Belgium [preferable on the graph paper provided]. ii. Suppose that Ireland and Germany can supply medicinal products to Belgium at a price of €10 and €15 per pack, respectively. Under free trade, which nation exports medicinal products to Belgium? How many medicinal products does Belgium consume, produce, and import? iii. Assume that Belgium imposes a 100 percent nondiscriminatory ad valorem tariff on its medicinal products imports. Which nation exports medicinal products to Belgium? How many medicinal products will Belgium consume, produce, and import? iv. Assume now that Belgium forms a customs union with Germany. Is the customs union that belgium forms with Germany trade creating, trade diverting, or neither? Provide a reason for your choice of answer. What is the Euro value…

2. Winners and losers from free trade Consider the imaginary economy of Meekerton and the market for meekies, a hypothetical good. Without international trade the domestic price of meekies is $25. Suppose that the world price of meekies is $28. Assume that if it were to enter the international market for meekies, Meekerton is too small to influence the world price. If Meekerton decides to participate in free trade, then it will export meekies. Given current economic conditions in Meekerton, complete the following table by indicating whether each of the statements is true or false. Statement Meekertonian producers were better off without free trade than they are with it. Meekertonian consumers are better off under free trade than they were before. O True o False True False True or False: When a nation is too small to affect world prices, allowing free trade will sometimes decrease total surplus in that country, regardless of whether it imports or exports as a result of international…

Figure 9-1 PRICE (Dollars per unt of coffee) 70 8 50 10 с B P Uganda TI/ 9 D Domestic Supply 15 QUANTITY (Units of coffee) Domestic Demand World Price 20 Refer to Figure 9-1. From the figure it is apparent that Uganda will export coffee if trade is allowed. Uganda will import coffee if trade is allowed. Uganda has nothing to gain either by importing or exporting coffee. O the world price will fall if Uganda begins to allow its citizens to trade with other countries.

2. 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 meekers is $33. Suppose that the world price of meekers is $25. Assume that Meekertown is too small to influence the world price of meekers once it enters 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 are better off under free trade than they were before. True or False: When a country is too small to affect the world price, allowing 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