If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy reducing or eliminating imports of rice into the country would include:
A) Japan will be able to consume a combination of rice and other goods beyond their domestic production possibilities curve.
B) the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall.
C) the real incomes of Japanese rice consumers would rise, but the real incomes of Japanese rice producers would fall.
D) the price of rice in Japan will fall.

Question

Quizplus · Accepted Answer

If Japan does not have a comparative advantage in producing rice and decides to reduce or eliminate rice imports, domestic rice producers may benefit from reduced competition, potentially increasing their real incomes. However, this policy would likely lead to higher rice prices domestically due to the reduced supply, negatively affecting real incomes of consumers who now have to pay more for rice.

If Japan Does Not Have a Comparative Advantage in Producing