Refer to the figure below to answer the following questions. Figure 7.2.1
The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.
-In Figure 7.2.1,if the economy moves from no trade to international trade,total surplus in Canada ________ by ________.
A)increases;$128 million
B)decreases;$192 million
C)increases;$320 million
D)decreases;$256 million
E)decreases;$128 million

Question

Refer to the figure below to answer the following questions.  Figure 7.2.1
The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.
-In Figure 7.2.1,if the economy moves from no trade to international trade,total surplus in Canada ________ by ________.
A)increases;$128 million 
B)decreases;$192 million 
C)increases;$320 million 
D)decreases;$256 million 
E)decreases;$128 million

Quizplus · Accepted Answer

The total surplus in an economy typically increases when moving from no trade to international trade due to gains from specialization and access to a larger market, which leads to efficiency improvements and benefits for consumers and producers. The specific amount ($128 million) would be determined by the details in Figure 7.2.1, which illustrates the economic changes quantitatively.

Refer to the Figure Below to Answer the Following Questions