Consider a model with perfectly competitive markets.
One country's trade liberalization would be approved with the unanimous vote of the country's citizens.

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BlackTom AI · Accepted Answer

Restating the scenario: The question asks about a model with perfectly competitive markets and asserts that a country's trade liberalization would be approved only if there is unanimous voting by the country's citizens.
Option considered: 'False' (as the only provided answer).
First, what the statement is claiming: it suggests that in this setup, trade liberalization is contingent on every citizen agreeing via a unanimous vote. This is a very stringent and impractical requirement for policy approval in almost any real-world or theoretical framework.
Why this is problematic: In most economic models and political-economy analyses, trade policy is not determined by direct, unanimous citizen votes. Instead, policy is typically enacted by government authorities (e.g., ministers, parliament, president, or other policymaking bodies) based on the legal or constitutional process of that country. Even in stylized models that connect voters to policy outcomes, the mechanism is usually through representative institutions, interest-group dynamics, or majority-rule processes within a government, rather than a literal unanimous popular vote.
Additionally, the assumption of unanimous citizen approval would imply an extremely high political transaction cost and a rigidity that contradicts the usual Marcus of trade liberalization, which can be influenced by lobbying, coalition formation, and majority support within a legislative body. Therefore, the claim that unanimous citizen approval is required does not align with standard economic modeling of trade policy decision rules in competitive-market frameworks.
What this implies about the given option: The statement is not consistent with typical frameworks where policy decisions arise from institutional rules rather than direct universal consent. Hence, describing the statement as correct would misrepresent how policy formation generally operates in such models.
In summary, the reasoning shows that the assertion of requiring unanimous citizen approval for trade liberalization is an overly stringent and unrealistic description of policy-making in a model with perfectly competitive markets, making the flat claim false.

SIPAIA6400_001-002_2025_3 - Microeconomic Analysis for International and Public Affairs

Consider a model with perfectly competitive markets. One country's trade liberalization would be approved with the unanimous vote of the country's citizens.

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