8. Assume that now trade happens. The relative supply of wine in the home country is less than the world (because the home country is better at making laptops). What would happen to the relative price of wine to laptop in the home country when trade is allowed? Which group would benefit from this? a) Pwine/Ptaptop would increase and laptop manufacturers would gain b) Pwine/Plaptop would increase and wine makers would gain c) Pwine/Ptaptop would decrease and laptop manufacturers would gain d) Pwine/Plaptop would decrease and wine makers would gain

ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter19: International Trade
Section: Chapter Questions
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8. Assume that now trade happens. The relative supply of wine in the home country is less than
the world (because the home country is better at making laptops). What would happen to the
relative price of wine to laptop in the home country when trade is allowed? Which group
would benefit from this?
a) Pwine/Ptaptop would increase and laptop manufacturers would gain
b) Pwine/Plaptop would increase and wine makers would gain
c) Pwine/Ptaptop would decrease and laptop manufacturers would gain
d) Pwine/Piaptop would decrease and wine makers would gain
Transcribed Image Text:8. Assume that now trade happens. The relative supply of wine in the home country is less than the world (because the home country is better at making laptops). What would happen to the relative price of wine to laptop in the home country when trade is allowed? Which group would benefit from this? a) Pwine/Ptaptop would increase and laptop manufacturers would gain b) Pwine/Plaptop would increase and wine makers would gain c) Pwine/Ptaptop would decrease and laptop manufacturers would gain d) Pwine/Piaptop would decrease and wine makers would gain
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