Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is $25. Suppose that the world price of meekers is $23....

Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is $25. Suppose that the world price of meekers is $23. 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 ______ (export/import) 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 better off under free trade than they were before.
Meekertownian producers were better off without free trade than they are with it.

True or False: When a country is too small to affect the world price, allowing free trade will sometimes decrease total surplus in that country, regardless of whether it imports or exports as a result of international trade.

True

False

Jun 09, 2022

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Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is $25. Suppose that the world price of meekers is $23....

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