Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is $20. 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
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 were worse off without free trade than they are with it.
O
O
Meekertownian producers are worse off under free trade than they wer
before.
.
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