2. winners and losers from free trade

consider the market for meekers in the imaginary economy of meeker town. in the absence of international trade, the domestic price of meekers is $28. suppose that the world price of meekers is $35. 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 meekers. given current economic conditions in meekertown, complete the following table by indicating whether each of the statements is true or false.

meeker townian consumers were worse off without free trade than they are with it.

meeker towns producers are worse off under free trade than they were before.

when a country is too small to affect the world price, 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.