Aquilonia Has Decided to End Its Policy of Not Trading

question 35

Multiple Choice

Aquilonia has decided to end its policy of not trading with the rest of the world.When it ends its trade restrictions,it discovers that it is importing cinnamon,exporting steel,and neither importing nor exporting rugs.What can we conclude about consumer surplus in Aquilonia

• A)It is now higher for steel, lower for cinnamon, and the same for rugs.
• B)It is now higher for cinnamon and steel, but not rugs.
• C)It is now higher for cinnamon and rugs, but not steel.
• D)It is now higher for cinnamon, lower for steel, and the same for rugs.

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Definitions:

Freud

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