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4. (15 points) Use indifference curves as an indicator of national welfare to evaluate the following statement: Suppose the price of a country's exports


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4. (15 points) Use indifference curves as an indicator of national welfare to evaluate the following statement: "Suppose the price of a country's exports increases relative to its imports. This only benefits the country if it increases its quantity of exports in response. If a country does not increase exports when their relative price rises, then the price increase will not increase welfare." State your answer and explain in words. You might use a graph to help in your explanation.

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The statement suggests that an increase in the price of a countrys exports relative to its imports will lead to an increase in the countrys welfare if the country responds to the price increase by inc... blur-text-image

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