The world price of grapefruits is above the price that currently prevails in Cub

Question

The world price of grapefruits is above the price that currently prevails in Cuba in the absence of trade. Assuming that Cuba is a small economy compared to the rest of the world, what happens if Cuba decides to open up trade with the world grapefruit market?

The price of domestic Cuban grapefruit for consumers will...

(A) Decrease.

(B) Increase.

(C) Not Change.

Cuban exports of grapefruits will...

(A) Decrease.

(B) Increase.

(C) Not Change.

Lastly, consumer surplus in cuba will...

(A) Decrease.

(B) Increase.

(C) Not Change.

while producer surplus in cuba will...

(A) Decrease.

(B) Increase.

(C) Not Change.

Explanation / Answer

The price of domestic Cuban grapefruit for consumers will

b)increase

Cuban exports of grapefruits will.

b)increase

cosumer surplus in cuba

(A) Decrease.

while producer surplus in cuba will.

(b)increase

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.