With No Trade, the Equilibrium Price of Grapes Is $2

question 241

Multiple Choice

With no trade, the equilibrium price of grapes is $2 per pound in Macroland and $4 per pound in Econoland. After trade opens between the two countries, the price of grapes increases to $3 per pound in both countries. Which statement explains who gains and who loses when this happens?

• A) Winners include consumers in both countries, grape producers in Macroland, and farm workers in Econoland. Losers include grape producers in Econoland and farm workers in Macroland.
• B) Winners include grape producers in both countries, consumers in Econoland, and farm workers in Macroland. Losers include consumers in Macroland and farm workers in Econoland.
• C) Winners include consumers, grape producers, and farm workers in Econoland. Losers include consumers, grape producers, and farm workers in Macroland.
• D) Winners include consumers in Econoland, grape producers, and farm workers in Macroland. Losers include consumers in Macroland, and grape producers and farm workers in Econoland.

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Definitions:

Repression

A psychological defense mechanism where an individual unconsciously blocks unwanted thoughts, desires, or memories from conscious awareness.

William James

A pioneering psychologist and philosopher who was a leading thinker of the late 19th century and is often referred to as the "Father of American psychology."

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The individual's awareness of their own identity and personal attributes.

Certainty

The state of being absolutely confident or sure about something.