The world has become more globalized over the past several decades. International trade enables countries to focus on activities in which they have a comparative advantage. Accordingly, this enhances quality of life by increasing the efficiency of production. As we have already seen, the national account includes international flows from exports, imports, factors payments, and transfers. As a result of these flows, trading countries can have a trade deficit or trade surplus.

First, briefly explain the economic gains society can obtain by having some individuals, regions, or countries specialize in the production of certain goods. In doing so, be certain your answer includes an explanation of how people in a market economy choose occupations suiting their talents and interests as they develop specialized skills in their industry to trade with others;

Next, briefly explain the reason(s) why voluntary trade is advantageous to stakeholders in the exchange;

Then, briefly explain the reason(s), if voluntary trade is advantageous to stakeholders in the exchange, why do countries impose tariffs;

Next, graphically illustrate a domestic demand curve and domestic supply curve. In doing so, be certain your answer includes labeling the autarky price and plots the equilibrium price and quantity in autarky, labeling the consumer surplus and the producer surplus, and labeling the world price for imports;

Then, on the graphical illustration you just developed plot the quantity supplied at the world price and the quantity demanded at the world price. In doing so, be certain your answer includes labeling the new consumer surplus and producer surplus;

Lastly, briefly explain the impact of imports on the market. In doing so, be certain your answer includes an explanation of the impact on consumer surplus and producer surplus.