In France,two qualities of wines are produced - table wine sold in bulk (bring your own bottle) and a higher quality of wine.Suppose that the English import all their wine from France.Then,we would we expect to find,on average that
A) the English drink more of the higher quality of wine,because transportation costs will lower the relative price of high-quality wine relative to table quality wine.
B) the English will drink more table quality wine,because transportation costs will raise the relative price of table quality wine to high-quality wine.
C) the French will drink more of the high quality wine because transportation costs reduce demand for wine in England.
D) the French will drink more of the high quality wine because the wine is produced there.
Correct Answer:
Verified
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