If the World Price of a Good Is Below the No-Trade
If the world price of a good is below the no-trade domestic price, a country
A) will benefit from importing the good.
B) cannot benefit from trade.
C) has a comparative advantage in the production of that good.
D) will benefit from exporting the good.
E) will not engage in trade for that good.
If a nation imports a good that can be domestically produced, what happens to the quantity consumed of the good and why?
A) The quantity consumed remains constant because the price is unchanged.
B) The quantity consumed decreases because the market price increases.
C) The quantity consumed increases because the nation produces more of the good.
D) The quantity consumed decreases because the market price decreases.
E) The quantity consumed increases because the market price decreases.
A country exports a good if
A) the world price of the good is above the country's no-trade equilibrium price.
B) the world price of the good is below the country's no-trade equilibrium price.
C) it has a high opportunity cost of production.
D) it cannot import the good.
E) the quantity demanded of the good in the country is greater than the quantity supplied at the world price.
As a result of importing a good, domestic consumers ________ the quantity consumed and the price of the good ________.
A) increase; falls
B) decrease; falls
C) increase; rises
D) decrease; rises
E) increase; does not change