To answer the next question, use the following graph showing the domestic demand and supply curves for a specific standardized product in a particular nation.
If the world price for this product is $1.60, this nation will experience a domestic
A. surplus of 160 units, which it will export.
B. surplus of 160 units, which will reduce the world price to $1.00.
C. shortage of 160 units, which will increase the domestic price to $1.60.
D. shortage of 160 units, which it will meet with 160 units of imports.
Answer: A
You might also like to view...
Refer to Figure 1-6. Calculate the area of the trapezoid X
A) $361 B) $450 C) $1,020 D) $1,140
Suppose a major computer virus struck the nation's computers and all hard drives were erased. What would happen in the labor market?
a. The real wage would increase and so would employment. b. The real wage would not change, but employment would decrease. c. The real wage would increase and employment would decrease. d. The real wage would decrease and so would employment. e. The real wage would decrease and employment would increase.
CARFAX is a company that compiles and sells histories of used cars. CARFAX reduces the:
A. number of cars exchanged in the used car market. B. information asymmetry in the used car market. C. number of used cars offered for sale in the market. D. cost of used cars in the market.
The demand for insulin is quite inelastic. The demand for Pepsi is quite elastic. Suppose the elasticity of supply for insulin is the same as the elasticity of supply for Pepsi
If a $0.20 tax was imposed on each of these goods (holding everything else constant), which consumers would pay more of the tax? A) the Pepsi consumers B) the insulin consumers C) There would be no difference in the amount of tax paid by the consumers. D) More information is needed to determine which consumers pay more of the tax. E) The premise of the question is wrong because the elasticity of demand and the incidence of a tax are not related.