Question 2:

A move from no trade to free trade in a particular commodity will

1. lead to an increase in efficiency in the sense that everyone can be made better off.

2. make everyone better off because the gainers can fully compensate the losers and still be better off.

3. make society better off if a dollar is worth the same to every gainer as it is to every loser.

4. do all of the above.

Choose the option that yields the correct answer.