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:

Opportunities

Potential avenues through which an organization or individual can grow, improve, or gain an advantage.

Mental Fixedness

A cognitive bias that limits a person to using an object or idea in only the way it is traditionally used.

Habit-Breaking Strategies

Techniques and methods designed to help individuals quit or modify detrimental habits.

Cognitive Styles

Individual differences in the way people perceive, think, solve problems, learn, and relate to others.