When a Country That Imported a Particular Good Abandons a Free-Trade

question 16

Multiple Choice

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

• 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:

Microeconomics

Microeconomics analyzes individual decision makers and markets, focusing on supply and demand, price, and output decisions in individual markets.

Production Possibilities Frontier

A depiction that captures every maximum production possibility for two specific commodities, predicated on a range of inputs that includes resources and additional variables.

Opportunity Costs

The expense incurred from not selecting the next most favorable choice when a decision is taken or preferring one alternative over another.

Efficient

The characteristic of a resource allocation that maximizes the total surplus received by all members of society.