Question

A country decides to specialize in corn production. They now export corn and import shirts. Which groups of people in this country benefit from trade? Check all that are correct.

the owners and workers associated with the production of corn

people who buy shirts

people who buy corn

the owners and workers associated with the production of shirts

Answer 1

It is given that the country export corn and import shirts. This implies that trade had led to Specialisation in production. This would have several benefits .

The consumers would be better off as now the goods are being produced by country which has lower opportunity cost and hence is able to produce good at a lower cost. So the prices or the cost to consumers decline for both goods and hence the consumers of both goods are benefitted.

Also the producer of corn would be benefited of that country. Since now the country specialises in corn production , more of corn is produced and exported to the other countries. So the production increases, increasing the wages and incomes of people associated with corn production. So the workers and producers of corn are better off.

Hence the options are A,B, and C

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