Practice mode Non-Tariff Trade Barriers

What is the effect of foreign government export subsidies on goods in which Pakistan has a comparative disadvantage?

Correct answer A. Lead to increases in Pakistani consumer surplus

Explanation

Subsidised exports arrive at lower prices, so Pakistani buyers pay less and consume more, which raises consumer surplus even though competing local producers lose.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.