Refer to the Figure Below to Answer the Following Question

question 115

Multiple Choice

Refer to the figure below to answer the following question. Figure 7.2.4
-Refer to Figure 7.2.4.The graph shows the demand for shoes in Brazil,D_B,the supply of shoes produced in Brazil,S_B,and the market equilibrium in Brazil when it does not trade internationally.If the world price of a pair of shoes is $20 and Brazil opens up and trades internationally,producer surplus in Brazil ________ and consumer surplus in Brazil ________.

• A)increases by area C + D;decreases by area C
• B)increases by area C;decreases by area C and a deadweight loss equal to area D arises
• C)increases by area D;decreases by area D
• D)decreases by area C;increases by area C + D
• E)decreases by area C + D;increases by area C

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Definitions:

Comprehensive Income

The total change in equity for a business that is not attributable to owners' investments or withdrawals.

Held-To-Maturity Securities

Debt securities that a company has the positive intent and ability to hold until they mature.

Noncurrent Assets

Long-term assets not expected to be liquidated or turned into cash within one year, such as property, plant, and equipment.

Unrealized Gains

Increases in value of assets that have not been sold yet, and therefore, the gains are not reflected in the financial statements as actual income.