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SCENARIO: PRODUCTION IN NORWAY

Question 98

Multiple Choice

SCENARIO: PRODUCTION IN NORWAY
Suppose that Norway is a small country and currently produces 100,000
Board feet of lumber at $600 per 1,000 board feet.Then it begins to trade
At the world price of $500 per 1,000 board feet.As a result of trade,
Norway's production falls to 50,000 board feet and its consumption
Increases to 200,000 board feet.
Reference: Ref 8­2
(Scenario: Production in Norway) What is Norway's total gain in consumer
Surplus once it begins to trade?


A) $10,000
B) $15,000
C) $100,000
D) $150,000

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