If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,
A) the country will be an exporter of the good.
B) the country will be an importer of the good.
C) the country will be neither an exporter nor an importer of the good.
D) Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.

Question

Quizplus · Accepted Answer

If the domestic price is higher than the world price, the country will import the good because it can be purchased more cheaply from abroad.

If a Country Allows Trade And, for a Certain Good