When a Country Abandons a No-Trade Policy,adopts a Free-Trade Policy,and

question 224

Multiple Choice

When a country abandons a no-trade policy,adopts a free-trade policy,and becomes an importer of a particular good,

• A)producer surplus increases and total surplus increases in the market for that good.
• B)producer surplus increases and total surplus decreases in the market for that good.
• C)producer surplus decreases and total surplus increases in the market for that good.
• D)producer surplus decreases and total surplus decreases in the market for that good.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, providing them with limited liability, and is permitted to own assets, incur liabilities, and sell securities, among other rights.

Partnership

A legitimate business model involving collaboration between two or more people in managing and dividing earnings.

Potential Loss

The possible financial harm or loss a business could suffer due to unforeseen events or risks.

Investment

The allocation of resources, usually money, in expectation of earning a return or some form of benefit in the future.