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Consider a small economy in the context of the (perfectly) competitive market environment. Consider the case whenP D
Consider a small economy in the context of the (perfectly) competitive market environment. Consider the case whenPD
W, wherePDis the domestic equilibrium price of good x that prevails without trade (in autarky), andPWis the world price of good x. Which of the following statements are true? Check all that apply.
A.Under free trade, the country imports good x.
b. Consumer surplus falls from opening to free trade.
c. Producer surplus rises from opening to free trade.
d. Total surplus is the same in autarky and with free trade.
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