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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This is true false please answer all