Question

ratified in 2017 by two - thirds of world trade organization member nations, the trade facilitation agreement (tfa) is a trade - reform measure that aims to reduce slow cargo import inspections and other costly aspects of international trade. in a 2021 report, economist jeayson beckman modeled global market prices of several agricultural commodities under both the tfa and an alternative trade - reform scenario: removal of agricultural tariffs (taxes on imports) that generally increase prices on imported goods. after reviewing data from the report, a student concludes that overall, consumers of the commodities listed in the table would likely benefit more from the tfa than they would from tariff removal. percent change in average global market prices by commodity in two agricultural trade - reform scenarios commodity percent change in tfa scenario percent change in tariff - removal scenario wheat -1.35 +0.45 vegetable oils -2.24 -0.36 sugar -0.74 +0.37 fruits and vegetables -1.50 +0.04 which choice most effectively uses data from the table to support the students claim? a) under the tariff - removal scenario, the average price of vegetable oils would increase, but the average prices of wheat and sugar would decrease. b) under the tariff - removal scenario, the average price of vegetable oils, wheat, and fruits and vegetables would decrease by more than 1%, while the average price of sugar would decrease by less than 1%. c) under the tfa scenario, the average price of sugar would decrease, whereas under the tariff - removal scenario, only the average price of vegetable oils would decrease. d) under the tfa scenario, the average price of sugar would decrease by a smaller amount than any of the other three commodities prices would, whereas its average price would increase under the tariff - removal scenario.

Explanation:

We need to check each option against the data in the table. For option A, under the tariff - removal scenario, vegetable oils have a percent change of - 0.36, wheat has + 0.45 and sugar has + 0.37. Vegetable oils' price decreases while wheat and sugar prices increase, which does not match the claim. For option B, under the TFA scenario, vegetable oils decrease by 2.24%, wheat by 1.35%, sugar by 0.74% and fruits and vegetables by 1.50%. The price of sugar decreases by less than 1% as claimed. For option C, under the TFA scenario, the average price of sugar is not the lowest decrease among the four commodities. For option D, under the tariff - removal scenario, the average price of the four commodities does not increase.

Answer:

B. Under the TFA scenario, the price of sugar would decrease by less than 1%.