Suppose country X currently produces widgets.Then it
Establishes a preferential trading agreement with country Y.
Following the formation of the PTA, country X no longer produces
Widgets and imports widgets from country Y.What has occurred?
A)There is trade diversion and a welfare gain for both country X and country Y.
B)There is trade diversion, a welfare gain for country Y, and a welfare loss for country X.
C)There is trade creation and a welfare gain for both country X and country Y.
D)There is trade creation, a welfare gain for country Y, and a welfare loss for country X.

Question

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The Answer of Suppose country X currently produces widgets.Then it
Establishes a preferential trading agreement with country Y.
Following the formation of the PTA, country X no longer produces
Widgets and imports widgets from country Y.What has occurred?
A)There is trade diversion and a welfare gain for both country X and country Y.
B)There is trade diversion, a welfare gain for country Y, and a welfare loss for country X.
C)There is trade creation and a welfare gain for both country X and country Y.
D)There is trade creation, a welfare gain for country Y, and a welfare loss for country X.

Suppose Country X Currently Produces Widgets.Then It