If an Import-Competing Firm Is the Only Domestic Producer of a Good

question 12

Multiple Choice

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare.

• A) increase; increase; increase; increase
• B) decrease; decrease; decrease; decrease
• C) decrease; decrease; increase; increase
• D) increase; increase; decrease; decrease
• E) increase; increase; decrease; increase

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Definitions:

Secondary Obligation

An obligation that arises indirectly or as a result of another primary obligation, often in legal or financial contexts.

Statute of Frauds

A legal concept that requires certain types of contracts to be written and signed to be enforceable.

Statute of Frauds

A legal concept that requires certain types of contracts to be executed in writing and signed by the party against whom enforcement is sought, to be legally enforceable.

Interest in Land

A legal right or claim to use, control, or dispose of real property.