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Scenario 9-1 The Before-Trade Domestic Price of Tomatoes in the United States

Question 128

Multiple Choice

Scenario 9-1
The before-trade domestic price of tomatoes in the United States is $500 per ton.The world price of tomatoes is $600 per ton.The U.S.is a price-taker in the market for tomatoes.
-Refer to Scenario 9-1.If trade in tomatoes is allowed,the price of tomatoes in the United States


A) will increase,and this will cause consumer surplus to decrease.
B) will decrease,and this will cause consumer surplus to increase.
C) will be unaffected,and consumer surplus will be unaffected as well.
D) could increase or decrease or be unaffected;this cannot be determined.

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