Supply and Demand Geometry for International Trade Depicting the Gains from Trade

West market	Trade market	East market

    Production adjustments lead to specialization gains (these are sometimes referred to as production gains):
    --An exporter increases production. The country gains by selling the extra ouput on the world market for more than the value of the resources used to produce it.
    --An importer replaces some domestic production with imports. The country gains by spending less on the replacement imports than it saves by freeing up domestic resources.
 
    In the diagram above: the exporter's specialization gains = ______
                                      the importer's specialization gains = ______
 
    Consumption adjustments lead to exchange gains (these are sometimes referred to as consumption gains):
    --An exporter diverts some domestic consumption to exports. The country gains by selling the diverted units on the world market for more than their value to domestic consumers.
    --An importer increases consumption with imports. The country gains by acquiring extra units that consumers value more highly than the price they pay.
 
    In the diagram above: the exporter's exchange gains = ______
                                      the importer's exchange gains = ______
 
    Specialization and exchange gains combine to yield a country's overall gains from trade. Each country's gains from trade show up in the trade market diagram.
 
    In the diagram above: the exporter's gains from trade = ______
                                      the importer's gains from trade = ______