When a Country Allows Trade and Becomes an Importer of a Good

question 18

Multiple Choice

When a country allows trade and becomes an importer of a good,

• A)consumer surplus and producer surplus both increase.
• B)consumer surplus and producer surplus both decrease.
• C)consumer surplus increases and producer surplus decreases.
• D)consumer surplus decreases and producer surplus increases.

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Definitions:

Quantity Supplied

The amount of a good or service that producers are willing to sell at a given price over a specified period.

Market Supply Curve

A graphical representation showing the quantity of goods that sellers are willing and able to sell at different prices.

Individual Supply Curves

Graphs that depict the relationship between the price of a good and the quantity supplied by an individual producer.

Quantity Supplied

The measure of a good or service that firms are eager and prepared to distribute at an established price throughout a set period.