When the nation of Brownland first permitted trade with other nations,domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.We can conclude that
A)Brownland became an exporter of wheat.
B)consumer surplus in Brownland increased by $3 million.
C)the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left.
D)this example is inconsistent with the economic theory of international trade.

Question

Quizplus · Accepted Answer

When Brownland opened up to trade, the increase in producer surplus suggests that domestic producers were able to sell more wheat at higher prices, which is consistent with becoming an exporter. The increase in total surplus indicates that the gains from trade outweighed any losses to consumers.

When the Nation of Brownland First Permitted Trade with Other