Suppose That: (1) the United States Has a Comparative Advantage

Multiple Choice

Suppose that: (1) the United States has a comparative advantage in producing chemicals; (2) Costa Rica has a comparative advantage in producing sugar, and (3) the United States imposes a quota on its imports of Costa Rican sugar. Now suppose that the United States eliminates its import quotas on Costa Rican sugar. Which of the following is MOST likely to occur for the United States?

A) Consumer surplus for American consumers of sugar products will fall.
B) Producer surplus for American sugar producers will rise.
C) Consumer surplus for American consumers of sugar products will rise.
D) Tariff revenues for the U.S. government will rise.