Trade Barriers Disrupting Comparative Advantage

Steps:

• Establish premise: Developed economies import cereals due to lower costs abroad, driven by comparative advantage.
• Identify reduction factors: Barriers like restrictions or policy changes that increase import costs or block trade.
• Evaluate options: Assess each for impact on import volume from developing to developed economies.
• Select best: Choose direct prohibition over indirect demand or cost shifts.

Why B is correct:

• An embargo is a quantitative trade barrier that legally bans imports, directly halting international cereal trade per WTO definitions of non-tariff barriers.

Why the others are wrong:

• A: Reduced popularity lowers overall demand but does not target or block international trade specifically.
• C: Taxes on domestic production raise local costs, making imports relatively cheaper and increasing trade.
• D: Subsidies lower export prices from developing economies, enhancing competitiveness and boosting trade volume.

Final answer: B