Dumping refers to selling a commodity abroad at a price that is below its cost of production or below the price charged in the domestic market

Suppose country X currently does not produce widgets. Instead, it imports widgets from country Z. Then country X establishes a preferential trading agreement with country Y. Following the formation of the PTA, it imports widgets from country Y. What has occurred?

a. There is trade diversion and a welfare loss for country X. b. There is trade creation and a welfare loss for country Y. c. There is trade diversion and a welfare gain for country X. d. There is trade creation and a welfare gain for country Y.

Everything else held constant, Americans who love French wine benefit most from

A) a decrease in the dollar price of euros. B) an increase in the dollar price of euros. C) a constant dollar price for euros. D) a ban on imports from Europe.