When the two-good production and trade models are extended from a given country to the entire world
A)the price of the exported good falls for the country going global.
B)the cost of producing the exported good rises for the country going global.
C)the price of the imported good falls to the country's consumers.
D)the price of both goods rises for the country going global.

Question

Quizplus · Accepted Answer

When a country goes global, it gains access to a larger market, which increases competition and brings down the price of the imported good for its consumers. However, the price of the exported good may also fall as it competes with other countries on the global market. The cost of producing the exported good doesn't necessarily rise, and it's unlikely that the price of both goods will rise.

When the Two-Good Production and Trade Models Are Extended from a Given