Question

True or false: when a country is too small to affect the world price, allowing for free trade will always increase total surplus in that country, regardless of whether it imports or exports as a result of international trade.

Answer 1

It is true, but the world can only benefit if there is international trade. The countries can benefit from international business because they can do importing what they cannot competently produce locally and do exporting those services and products where it has a complete or virtual advantage.