Total welfare gains from trade to the economy can be measured:
A)as the sum of consumer and producer surpluses.
B)as the difference between producer surplus and consumer surplus.
C)as the sum of consumer and producer surpluses minus taxes
D)as the net gain in consumer surplus that results from an action that alters a market equilibrium.

Question

Total welfare gains from trade to the economy can be measured:​
A)​as the sum of consumer and producer surpluses.
B)​as the difference between producer surplus and consumer surplus.
C)​as the sum of consumer and producer surpluses minus taxes
D)​as the net gain in consumer surplus that results from an action that alters a market equilibrium.

Quizplus · Accepted Answer

The total welfare gains from trade to the economy can be measured as the sum of consumer and producer surpluses. This measures the net benefits to both consumers and producers, taking into account the gains from trade and the potential gains if the trade did not occur. This measure gives a more accurate picture of the overall welfare gains from trade compared to other metrics.

Total Welfare Gains from Trade to the Economy Can Be