In the market for apples in a certain country,consumer surplus increases and total surplus increases when that country
A)abandons a no-trade policy,adopts a free-trade policy,and becomes an importer of apples.
B)abandons a no-trade policy,adopts a free-trade policy,and becomes an exporter of apples.
C)abandons a free-trade policy,adopts a no-trade policy,and becomes an importer of apples.
D)abandons a free-trade policy,adopts a no-trade policy,and becomes an exporter of apples.

Question

Quizplus · Accepted Answer

If a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of apples, the domestic price of apples will decrease as imported apples are now available in the market. This decrease in price leads to an increase in consumer surplus as consumers are now able to purchase apples at a lower price. Additionally, the increase in the supply of apples from imports leads to an increase in total surplus as producers benefit from increased sales of their apples to foreign markets. Therefore, both consumer surplus and total surplus increase when the country becomes an importer of apples under a free-trade policy.

In the Market for Apples in a Certain Country,consumer Surplus