With no trade, the equilibrium price of grapes is $2 per pound in Macroland and $4 per pound in Econoland. After trade opens between the two countries, the price of grapes increases to $3 per pound in both countries. Which statement explains who gains and who loses when this happens?
A) Winners include consumers in both countries, grape producers in Macroland, and farm workers in Econoland. Losers include grape producers in Econoland and farm workers in Macroland.
B) Winners include grape producers in both countries, consumers in Econoland, and farm workers in Macroland. Losers include consumers in Macroland and farm workers in Econoland.
C) Winners include consumers, grape producers, and farm workers in Econoland. Losers include consumers, grape producers, and farm workers in Macroland.
D) Winners include consumers in Econoland, and grape producers and farm workers in Macroland. Losers include consumers in Macroland, and grape producers and farm workers in Econoland.
Correct Answer:
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