Trade theory suggests that the United States would gain from a subsidy provided by Japan to its calculator producers if the gains to American consumers of calculators more than offset the losses to American calculator producers.This occurs as long as the United States

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Trade theory suggests that a country would benefit from a subsidy provided by another country if the gains to domestic consumers from cheaper imports exceed the losses to domestic producers. This is true for a country that is a net importer of the subsidized product. Therefore, in this case, the United States would benefit from the subsidy provided by Japan if the United States is a net importer of calculators.

Trade Theory Suggests That the United States Would Gain from a Subsidy