Trade theory suggests that the United States would gain from a subsidy provided by Japan to its calculator producers if the gains to American consumers of calculators more than offset the losses to American calculator producers.This occurs as long as the United States:

Question

Quizplus · Accepted Answer

According to trade theory, if the United States is a net importer of calculators, it would benefit from a subsidy provided by Japan to its calculator producers. This is because the subsidy would lead to lower prices for calculators, which would benefit American consumers. In contrast, the losses to American calculator producers would be outweighed by the gains to American consumers if the United States is a net importer of calculators. Therefore, choice A is the best answer.

Trade Theory Suggests That the United States Would Gain from a Subsidy