Figure 17-1

Multiple Choice

Figure 17-1
-In Figure 17-1, in the absence of trade, the domestic price of shoes would be P_n. If the United States moved from a no-trade situation to free trade, which of the following would happen?

A) The domestic price of shoes would rise, and domestic consumption would fall.
B) Both the domestic price of shoes and domestic consumption would rise.
C) Both the domestic price of shoes and domestic consumption would fall.
D) The domestic price of shoes would fall, and domestic consumption would rise.