Suppose a country abandons a no-trade policy in favor of a free-trade policy.If,as a result,the domestic price of pistachios decreases to equal the world price of pistachios,then
A)that country becomes an exporter of pistachios.
B)that country has a comparative advantage in producing pistachios.
C)at the world price,the quantity of pistachios demanded in that country exceeds the quantity of pistachios supplied in that country.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

When the domestic price decreases to the world price, it indicates that the country does not have a comparative advantage in producing pistachios, leading to higher demand than supply domestically.

Suppose a Country Abandons a No-Trade Policy in Favor of a Free-Trade