Which of the following is true?
i.Comparative advantage drives international trade.
ii.Compared to a no-trade situation,in a market with imports,producer surplus is larger.
iii.Tariffs lower the domestic price of imported goods.
A) only i
B) only ii
C) only iii
D) i and ii
E) i and iii

Question

Quizplus · Accepted Answer

i. Comparative advantage is indeed a key principle that drives international trade, as it allows countries to specialize in the production of goods and services that they can produce more efficiently than others. ii. In a market with imports, producer surplus typically decreases because domestic producers face competition from foreign goods, which can lead to lower prices and reduced producer surplus. iii. Tariffs actually increase the domestic price of imported goods by adding a tax on them, making them more expensive for consumers.

Which of the Following Is True