If France has a comparative advantage in producing cheese and it allows trade:
A)everyone in the country benefits
B)everyone in the country loses
C)the gains of the producers exceed the losses of the consumers
D)the losses of the consumers exceed the gains of the producers

Question

Quizplus · Accepted Answer

If France has a comparative advantage in producing cheese and allows trade, it would mean that the country can produce cheese at a lower opportunity cost than other countries. This would lead to an increase in cheese production and exports. The increase in production and exports would lead to lower prices for cheese in the domestic market. The consumers in France would benefit from the lower prices, and this gain would exceed the loss incurred by the producers due to the lower prices. The producers would still benefit from the increased exports and the revenue generated from them. Therefore, the gains of the producers would exceed the losses of the consumers, and everyone in the country would benefit.

If France Has a Comparative Advantage in Producing Cheese and It