When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?
A)Domestic producers become worse off, and domestic consumers become better off.
B)The price received by domestic producers of bottled water increases.
C)The price paid by domestic consumers of bottled water decreases.
D)The price received by domestic producers of bottled water decreases.

Question

Quizplus · Accepted Answer

When a country becomes an importer of a good, such as bottled water, the domestic market is typically exposed to lower-priced goods from abroad. This leads to a decrease in the price received by domestic producers (D) because they have to lower their prices to compete with the imported goods, making them worse off. Conversely, domestic consumers benefit from the lower prices (C), making them better off. Therefore, the statement that the price received by domestic producers of bottled water increases (B) is not a consequence of becoming an importer, as it contradicts the general impact of imports on domestic producer prices.

When a Country Allows Trade and Becomes an Importer of Bottled