The figure shows the domestic supply and demand of a product in the United States. Suppose the world price of this product is $14. After the United States engages in free trade in this product, O A. the consumers will lose, the producers will win, but the overall economy will be worse off O B. the consumers will lose, the producers will win, but the overall economy will be better off O C. the consumers will win, the producers will win, and the overall economy will be better off O D. the consumers will win, the producers will lose, but the overall economy will be better off Price 21- 20 19 18 17 16 15 14 13 12 11- 10- 9 8 7 6 5 4 3 2 0 10 20 Supply Demand 30 40 50 60 70 80 90 100 110 120 130 Quantity (millions)

The figure shows the domestic supply and demand of a product in the United States. Suppose the world price of this product is $14. After the United States engages in free trade in this product, O A. the consumers will lose, the producers will win, but the overall economy will be worse off O B. the consumers will lose, the producers will win, but the overall economy will be better off O C. the consumers will win, the producers will win, and the overall economy will be better off O D. the consumers will win, the producers will lose, but the overall economy will be better off Price 21- 20 19 18 17 16 15 14 13 12 11- 10- 9 8 7 6 5 4 3 2 0 10 20 Supply Demand 30 40 50 60 70 80 90 100 110 120 130 Quantity (millions)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 15P

See similar textbooks

Similar questions

If opening up to free trade would benefit a nation, then why do nations not just eliminate their trade barriers, and not bother with international trade negotiations?
Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: QsT=-5+14P QsJ=-10+14P QdT=60-P QdJ=80-P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities in each country without trade. Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and Imports cameras and in what quantities?
Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.
You just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?
Are the gains from international trade more likely to be relatively more important to large or small countries?