If Freedonia Changes Its Laws to Allow International Trade in Software

question 296

Multiple Choice

If Freedonia changes its laws to allow international trade in software and the world price is lower than its domestic price,then it must be the case that

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