The table below shows the prices in Canada of one kilogram of cheddar cheese produced in three different countries.Assume that all cheddar cheese is identical.
TABLE 33-1
-Refer to Table 33-1.Suppose Canada and the United Kingdom negotiate a free-trade agreement in cheese.But Canada has a 40% tariff on cheese imported from other countries.From which country will Canada now buy its cheese?

Question

The table below shows the prices in Canada of one kilogram of cheddar cheese produced in three different countries.Assume that all cheddar cheese is identical.
  TABLE 33-1
-Refer to Table 33-1.Suppose Canada and the United Kingdom negotiate a free-trade agreement in cheese.But Canada has a 40% tariff on cheese imported from other countries.From which country will Canada now buy its cheese?

Quizplus · Accepted Answer

If Canada and the United Kingdom have a free-trade agreement, it means that they have agreed to trade with each other without any tariffs or barriers. Therefore, Canada can now import cheese from the United Kingdom without paying any tariffs. Since the question asks from which country Canada will now buy its cheese, the answer is A) all from the United Kingdom. None of the other options make sense, as Canada would either have to pay tariffs (options B, D, and E) or only buy from itself (option C), which defeats the purpose of a free-trade agreement.

The Table Below Shows the Prices in Canada of One