Suppose Country X Currently Does Not Produce Widgets.Instead

question 33

Multiple Choice

Suppose country X currently does not produce widgets.Instead,
It imports widgets from country Z.Then country X establishes a
Preferential trading agreement with country Y.Following the
Formation of the PTA, it imports widgets from country Y.What
Has occurred?

• A)There is trade diversion and a welfare loss for country X.
• B)There is trade creation and a welfare loss for country Y.
• C)There is trade diversion and a welfare gain for country X.
• D)There is trade creation and a welfare gain for country Y.

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Definitions:

Suburbanization

The shift of large segments of population away from the urban core and toward the edges of cities.

Urban Core

The central, innermost part of a city, characterized by high population density, significant infrastructure, and the primary business district, often contrasted with suburban or rural areas.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, leading to significant technological, socioeconomic, and cultural changes worldwide.

Personal Freedom

The liberty of an individual to exercise certain rights, freedoms, and expressions without unwarranted interference or restriction.