-If Australia starts to import a good that had previously been produced in Australia, the market price of the good in Australia
A) rises.
B) falls.
C) remains constant.
D) either remains constant or rises, depending on whether the supply of the good stays the same or increases.
E) There is not enough information to answer the question because we need to know if the market price in Australia had been above or below the world market price before trade began.

Question

-If Australia starts to import a good that had previously been produced in Australia, the market price of the good in Australia
A) rises. 
B) falls. 
C) remains constant. 
D) either remains constant or rises, depending on whether the supply of the good stays the same or increases. 
E) There is not enough information to answer the question because we need to know if the market price in Australia had been above or below the world market price before trade began.

Quizplus · Accepted Answer

The Answer is B

-If Australia Starts to Import a Good That Had Previously