A country moves from a situation of no trade to a situation where it exports a good.Which of the following does not occur in the market for this good in the exporting country?

Question

Quizplus · Accepted Answer

When a country moves from no trade to exporting a good, it means that they have a comparative advantage in producing that good, which leads to an increase in producer surplus and total surplus. However, there is no reason for deadweight loss to increase because trade allows both parties to benefit from a mutually beneficial exchange. Additionally, workers in the domestic industry gain from increased production of the exported good. Therefore, the only option that does not occur in the market for the exported good is an increase in deadweight loss.

A Country Moves from a Situation of No Trade to a Situation