Asked by Katlin Briggs on May 09, 2024
Verified
In a two-nation model, the equilibrium world price will occur where
A) one nation's export supply curve intersects the other nation's import demand curve.
B) exports are exactly twice the level of imports.
C) both nations' export supply curves are horizontal.
D) both nations' import demand curves are vertical.
Export Supply Curve
A graphical representation showing the relationship between the price of a good on the international market and the quantity that domestic producers are willing to export.
Import Demand Curve
A graph showing the relationship between the price of an imported good and the quantity of the good that consumers in the importing country are willing to buy.
Equilibrium World Price
The price at which the supply of a good on a global scale exactly matches the world demand for that good.
- Evaluate the impact of prices, both domestically and globally, on the behavior of exports and imports.
- Distinguish between export supply curves and import demand curves and their implications for trade.
Verified Answer
Learning Objectives
- Evaluate the impact of prices, both domestically and globally, on the behavior of exports and imports.
- Distinguish between export supply curves and import demand curves and their implications for trade.
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