Figure 9-18.On the diagram below,Q represents the quantity of peaches and P represents the price of peaches.The domestic country is Isoland.
-Refer to Figure 9-18.If Isoland allows international trade and if the world price of peaches is $5,then
A)Isoland has a comparative advantage,relative to other countries,in producing peaches.
B)Isoland will import peaches.
C)consumer surplus with trade exceeds consumer surplus without trade.
D)All of the above are correct.

Question

Figure 9-18.On the diagram below,Q represents the quantity of peaches and P represents the price of peaches.The domestic country is Isoland. 
-Refer to Figure 9-18.If Isoland allows international trade and if the world price of peaches is $5,then
A)Isoland has a comparative advantage,relative to other countries,in producing peaches. 
B)Isoland will import peaches. 
C)consumer surplus with trade exceeds consumer surplus without trade. 
D)All of the above are correct.

Quizplus · Accepted Answer

Isoland has a comparative advantage in producing peaches if the world price is $5 and they are exporting, indicating they can produce at a lower opportunity cost than other countries.