When a country removes trade barriers and exports pork chops and imports stereos,what will most likely happen?
A) Its growth will slow down.
B) Its productivity will decrease.
C) It will essentially be transforming pork chops into stereos.
D) Its economic well-being will decrease,while that of the country that sells stereos will increase.

Question

Quizplus · Accepted Answer

When a country removes trade barriers and starts exporting pork chops and importing stereos, it will essentially be engaging in the transformation of pork chops into stereos. This means that the country will shift its resources, including labor and capital, from pork production to stereo production. As a result, its economy will specialize in the production of one good while importing the other. The net effect of this specialization and trade will depend on the relative efficiency with which the two countries can produce each good.

When a Country Removes Trade Barriers and Exports Pork Chops