According to the partial equilibrium model of international trade, in a market for a good in which a country does enjoys a comparative advantage, free trade will lead to:
A) welfare gains for the country's producers of the good that are greater in absolute value than the losses for domestic consumers of the good.
B) welfare gains for the country's producers of the good that are smaller in absolute value than the losses to domestic consumers of the good.
C) welfare losses for the country's producers of the good that are larger in absolute value than the gains to domestic consumers of the good.
D) welfare gains for the country's producers of the good that may be larger than or smaller in absolute value than the gains to domestic consumers of the good.
E) welfare gains for producers of the good that are exactly equal to the losses to domestic consumers of the good.

Question

Quizplus · Accepted Answer

In a country with a comparative advantage, producers benefit more from free trade due to increased market access and higher prices, outweighing consumer losses.

According to the Partial Equilibrium Model of International Trade, in a Market