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An economy moves from autarky to free international trade.In the import sector,consumer surplus _____,producer surplus _____,and the economy as a whole _____.
A) rises;rises;gains
B) rises;falls;gains
C) falls;rises;gains
D) rises;falls;loses
Consumer Surplus
Consumer surplus is the difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.
Producer Surplus
The difference between what producers are willing to accept for a product because of its cost of production and what they actually receive (the market price).
Economy
A system for coordinating society’s productive activities.
- Delve into the effects of trade on the surplus value for consumers and producers spanning multiple markets.
- Examine the impact of tariffs, blockades, and open markets on international trade dynamics.
- Assess the overall economic welfare impacts of moving from autarky to free international trade.
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Learning Objectives
- Delve into the effects of trade on the surplus value for consumers and producers spanning multiple markets.
- Examine the impact of tariffs, blockades, and open markets on international trade dynamics.
- Assess the overall economic welfare impacts of moving from autarky to free international trade.
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