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 United States imports coffee, it increases the supply of coffee in the market, which decreases the price of coffee. As a result, U.S. consumers benefit from lower coffee prices, while U.S. producers suffer from lower revenue. Therefore, the gain from imports is primarily distributed between consumers (helped) and domestic producers (harmed).

During the First 6 Months of 2008, the United States