2. Winners and losers from free trade

Consider the imaginary economy of Meekerton and the market for meekies, a hypothetical good. Without international trade the domestic price of meekies is $21. Suppose that the world price of meekies is $33. Assume that if it were to enter the international market for meekies, Meekerton is too small to influence the world price.

If Meekerton decides to participate in free trade, then it will(__Export/import_)meekies.

Given current economic conditions in Meekerton, complete the following table by indicating whether each of the statements is true or false.

Statement	True	False
Meekertonian producers were better off without free trade than they are with it.
Meekertonian consumers are better off under free trade than they were before.

True or False: When a nation is too small to affect world prices, 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.

True

False