Use the following to answer questions:
Figure: The Domestic Market for Rice
-Assume that an economy moves from autarky to free international trade.In the export sector,consumer surplus _____,producer surplus _____,and the economy as a whole _____.

Question

Use the following to answer questions:
Figure: The Domestic Market for Rice 
-Assume that an economy moves from autarky to free international trade.In the export sector,consumer surplus _____,producer surplus _____,and the economy as a whole _____.

Quizplus · Accepted Answer

In the export sector, consumer surplus falls because domestic consumers face higher prices due to increased demand from abroad. Producer surplus rises as producers can sell more at higher prices. The economy as a whole gains from trade due to increased efficiency and access to larger markets.

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