If a country allows trade and, for a certain good, the domestic price without trade is lower 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 lower than the world price, the country has a comparative advantage in producing the good and will export it to other countries where the price is higher.

If a Country Allows Trade And, for a Certain Good