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SCENARIO: PRODUCTION IN NORWAY

Question 51

Multiple Choice

SCENARIO: PRODUCTION IN NORWAY
Suppose that Norway is a small country and currently produces 100,000
Board feet of lumber at $600 per 1,000 board feet.Then it begins to trade
At the world price of $500 per 1,000 board feet.As a result of trade,
Norway's production falls to 50,000 board feet and its consumption
Increases to 200,000 board feet.
Reference: Ref 8­2
(Scenario: Production in Norway) What is the Norway's total welfare gain
Once it begins to trade?


A) $5,000
B) $7,500
C) $15,000
D) $17,500

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