When the nation of Duxembourg allows trade and becomes an importer of software,
A)residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises.
B)residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls.
C)residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises.
D)residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls.

Question

Quizplus · Accepted Answer

When Duxembourg becomes an importer of software, local producers face competition from imports, potentially harming their business. However, consumers benefit from more choices and possibly lower prices, improving their welfare. Overall, the economic well-being of Duxembourg can rise due to the gains from trade, which typically outweigh the losses incurred by producers.

When the Nation of Duxembourg Allows Trade and Becomes an Importer