Compared to the no-trade situation, when a country imports a good:

Question

Quizplus · Accepted Answer

When a country imports a good, domestic consumers gain access to a wider variety of goods at lower prices, resulting in a consumer surplus. At the same time, domestic producers face increased competition, causing a decrease in their profits and a reduction in the domestic production of the good. However, the gains from consumer surplus generally outweigh the losses from producer surplus, resulting in a net gain for the country as a whole. Therefore, choice A is the correct answer.

Compared to the No-Trade Situation, When a Country Imports a Good