Suppose Scotland Goes from Being an Isolated Country to Being

question 262

Multiple Choice

Suppose Scotland goes from being an isolated country to being an exporter of wool.As a result,

• A) consumer surplus of Scottish consumers of wool increases.
• B) producer surplus of Scottish producers of wool increases.
• C) total surplus of Scottish wool consumers and producers remains constant.
• D) it is reasonable to infer that other countries have a comparative advantage over Scotland in wool production.

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Definitions:

Median-Voter Model

The theory that under majority rule the median (middle) voter will be in the dominant position to determine the outcome of an election.

Economically Efficient

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Dollar Voting

Dollar voting is the concept where consumers influence market trends and production decisions through the choices they make with their spending.

Competitive Markets

Markets characterized by many buyers and sellers where no single participant has significant influence over market prices.