The diagram below shows supply and demand curves for the same good in two countries, A and B. Based on the prices and areas labeled there, Country A CountryB P P P3 P a D D O The autarky price in Country A is P2. O Country B has a comparative advantage in this good. O Moving from autarky to free trade makes suppliers in Country A worse off by the amount a+b. O Moving from autarky to free trade makes demanders in Country B better off by the amount c+d.
The diagram below shows supply and demand curves for the same good in two countries, A and B. Based on the prices and areas labeled there, Country A CountryB P P P3 P a D D O The autarky price in Country A is P2. O Country B has a comparative advantage in this good. O Moving from autarky to free trade makes suppliers in Country A worse off by the amount a+b. O Moving from autarky to free trade makes demanders in Country B better off by the amount c+d.
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains Rrom Trade
Section: Chapter Questions
Problem 9PA
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