If Freedonia Changes Its Laws to Allow International Trade in Software

question 296

Multiple Choice

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price,then it must be the case that

• A)both consumer surplus and producer surplus increase.
• B)consumer surplus increases and producer surplus decreases.
• C)consumer surplus decreases and producer surplus increases.
• D)both consumer surplus and producer surplus decrease.

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Definitions:

Evolutionary Psychology

A theoretical approach in psychology that explains mental and psychological traits—such as memory, perception, or language—as adaptations, i.e., the functional products of natural selection.

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring, driving evolution.

Organisms' Success

The extent to which an organism can survive, reproduce, and pass its genes to the next generation in its specific environment.

Adaptive Function

Traits or behaviors that have evolved to serve a specific survival or reproductive purpose in the context of natural selection.