According to Figure 1, what is the gain or loss to the consumers from free trade, compared to autarky?Group of answer choicesgain of area a+b+cgain of area a+b+c+d+e+f+g+hloss of area a+dgain of area d+e+f+g+h **Educational Content: Supply and Demand in Free Trade**Figure 1 illustrates a country's domestic supply and demand curves for a certain good, along with the world price (\(P_w\)) that the country faces as a small player in the global market if it participates in free trade. Originally, the country did not engage in trade with other nations but is now beginning to adopt free trade policies.### Diagram Explanation:- **Axes:** - **Vertical Axis (Price):** Represents the price levels at different stages. - **Horizontal Axis (Quantity):** Represents the quantity of goods.- **Curves:** - **Supply Curve:** Upward sloping curve indicating higher quantities supplied at higher prices. - **Demand Curve:** Downward sloping curve indicating higher quantities demanded at lower prices.- **Price Levels:** - \(P_0\): Initial domestic price level without trade. - \(P_w + x\): World price plus an additional amount \(x\). - \(P_w\): World price level.- **Quantities:** - **\(Q_1\) to \(Q_5\):** Different quantity levels representing changes in supply and demand.- **Regions:** - **\(a\), \(b\), \(c\), \(d\), \(e\), \(f\), \(g\), \(h\), \(i\), \(j\), \(k\), \(l\), \(m\):** Different areas between the curves that represent consumer surplus, producer surplus, and impacts of price changes on the market.This diagram serves as a visual tool to understand how market equilibrium changes when a country engages in free trade, highlighting the shifts in producer and consumer surplus. Use this diagram to analyze questions 13-15 related to international trade and economics.

According to Figure 1, what is the gain or loss to the consumers from free trade, compared to autarky? Group of answer choices gain of area a+b+c gain of area a+b+c+d+e+f+g+h loss of area a+d gain of area d+e+f+g+h

According to Figure 1, what is the gain or loss to the consumers from free trade, compared to autarky? Group of answer choices gain of area a+b+c gain of area a+b+c+d+e+f+g+h loss of area a+d gain of area d+e+f+g+h

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(g) Explain how is the production structure (i.e. which goods are produced) affected in each country by opening up to trade. Is this consistent with the empirical evidence we observe in reality? How can this model be modified to produce a less stark result?
If a country closes off to trade and notices that the number of firms in an industry doubles in size, what economic theory would help us explain this phenomenon? A. Stolper-Samuelson. B. Melitz. C. Ricardian. D. Cournot. Explain your answer in up to 200 words and using a diagram
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(h) Suppose you conduct an opinion poll among individuals at Home, in which you ask them whether they have benefitted from international trade. What do you predict the response would be? Is this consistent with the empirical evidence we observe about people’s support for free trade in reality?
As you may have heard, Russia decided to invade its neighbor, which has led to international condemnation (albeit not on all fronts). The EU, a former major importer of gas from Russai, went ahead with sanctions. Imagine, if you will, that the respective heads of state get together and try to negotiate a trade agreement to end sanctions. They each have three possible choices: (a) Maintain tariffs against the other nation (T); (b) Seek mediation from the WTO, which would implement an international trade agreement at a small cost (M); (c) Unilaterally remove tariffs (F). The payoff matrix is as given below. Is there a dominant strategy for either player? Find all the (pure strategy) Nash equilibria in the game. How would this change if, instead, the mediation is costless and yields a payoff of 50 to each nation (assuming mutually successful mediation) and a payoff of 0 (if the other nation chooses otherwise)? **
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Answer this for me mate. Much appreciated.