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

question 37

Multiple Choice

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

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

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Definitions:

Overjustification Effect

A phenomenon in which being rewarded for doing an activity decreases a person's intrinsic motivation to perform that activity because the external reward overrides internal interest.

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later reward.

Externality Hypothesis

A theory suggesting that individuals attribute their own behavior to external factors and circumstances beyond their control.

Homeostasis

The regulatory process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.