This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were to open to trade, domestic producers would increase:
A. prices by $11.
B. production by 75 units.
C. prices by $5.
D. production by 35 units.
Answer: D
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Which factor of production is paid "interest"?
A) land B) labor C) capital D) entrepreneurship E) human capital
Goodyear benefitted when the Federal Reserve ________ in 2008. This Fed action would help increase demand for its tires, which allowed Goodyear to increase employment and increase prices
A) implemented a series of open market sales of Treasury bonds B) drove down interest rates C) increased the discount rate D) lowered the required reserve rate
If the legal and regulatory environment fails to protect property rights and is often used to favor some at the expense of others, which of the following is most likely to be encouraged?
a. productive activities b. a high rate of investment c. rent-seeking and unproductive activities d. competitive markets
Consider two products, automobiles and shoes. If shoes are labor intensive and automobiles are capital intensive, what can we expect in freetrade conditions?
a. The relative price of automobiles in the autoexporting country will decrease. b. The relative price of shoes in the shoeexporting country will increase. c. The capitalabundant country will produce more shoes. d. The laborabundant country will produce more automobiles.