Which of the following statements is TRUE?
I. If the United States bans the importation of bananas, consumer surplus will decrease.
II. If the United States bans the importation of bananas, producer surplus will decrease.
III. If the United States bans the importation of bananas, it will produce bananas at a cost exceeding their world purchase price.
A) I, II, and III
B) I and II only
C) I and III only
D) II and III only

Question

Quizplus · Accepted Answer

If the U.S. bans banana imports, consumer surplus decreases due to higher prices and limited availability. The U.S. may produce bananas at a higher cost than the world price, increasing production costs.

Which of the Following Statements Is TRUE