Figure 9-6
-When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,
A)consumer surplus increases and total surplus increases in the market for that good.
B)consumer surplus increases and total surplus decreases in the market for that good.
C)consumer surplus decreases and total surplus increases in the market for that good.
D)consumer surplus decreases and total surplus decreases in the market for that good.

Question

Figure 9-6 
-When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,
A)consumer surplus increases and total surplus increases in the market for that good. 
B)consumer surplus increases and total surplus decreases in the market for that good. 
C)consumer surplus decreases and total surplus increases in the market for that good. 
D)consumer surplus decreases and total surplus decreases in the market for that good.

Quizplus · Accepted Answer

When a country moves from a free-trade policy to a no-trade policy, consumer surplus typically decreases because consumers now have less access to goods and often have to pay higher prices for domestically produced alternatives. Total surplus also decreases because the economy loses the efficiency gains from trade, such as specialization and the allocation of resources according to comparative advantage.

Figure 9-6 -When a Country That Imported a Particular Good Abandons a Good