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-Refer to Exhibit 34-2

Question 59

Multiple Choice

  -Refer to Exhibit 34-2.The U.S.demand and supply for a good are shown.Under a policy of free trade,the world price is P<sub>W</sub>.If there is a policy change such that imports are prohibited,the price becomes P<sub>N,</sub> U.S.consumers are worse off if imports are __________; specifically,their consumers' surplus changes by area __________. A)  prohibited; P<sub>W</sub>ABD B)  permitted; P<sub>W</sub>DE C)  prohibited; P<sub>N</sub>BCP<sub>W</sub> D)  permitted; P<sub>N</sub> BDP<sub>W</sub> E)  none of the above
-Refer to Exhibit 34-2.The U.S.demand and supply for a good are shown.Under a policy of free trade,the world price is PW.If there is a policy change such that imports are prohibited,the price becomes PN, U.S.consumers are worse off if imports are __________; specifically,their consumers' surplus changes by area __________.


A) prohibited; PWABD
B) permitted; PWDE
C) prohibited; PNBCPW
D) permitted; PN BDPW
E) none of the above

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