The gains from trade creation are likely to be larger for a country if
A. the supply of the imported good by the foreigners is relatively inelastic.
B. it mainly imports primary products.
C. its import demand curve is relatively elastic.
D. the country's government sufficiently subsidizes the production of its exportable goods.
Answer: C
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Which of the following is a feature of an oligopoly market?
A) There is a large number of sellers in this market. B) There are no barriers to entry in this market. C) Each firm in this market earns zero economic profits. D) Each firm's action affects the decisions of its rival.
Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4. A 10% increase in capital would increase the current level of output to
A) 5020. B) 5050. C) 5200. D) 5500.