MicroEconomics (about 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 $33. Suppose that the world price for a meeker is $25. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market. 1. If Meekertown allows free trade, it will be 1. Export 2. Import meeker. 1. Meekertownian consumers are worse off under free trade than they were before. 1. True 2. False 2. Meekertownian producers are better off under free trade than they were before. 1. True 2. False 3. 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. 1. True

MicroEconomics (about 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 $33. Suppose that the world price for a meeker is $25. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market. 1. If Meekertown allows free trade, it will be 1. Export 2. Import meeker. 1. Meekertownian consumers are worse off under free trade than they were before. 1. True 2. False 2. Meekertownian producers are better off under free trade than they were before. 1. True 2. False 3. 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. 1. True

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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