During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers?

Question

Quizplus · Accepted Answer

When the U.S. imports coffee, domestic producers face competition, reducing their producer surplus. Consumers benefit from lower prices and increased variety, increasing consumer surplus. Overall, the total surplus in the U.S. increases due to the gains from trade.

During the First 6 Months of 2008, the United States