Asked by Victoria Rodriguez on Jun 09, 2024
Verified
Refer to Figure 20.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. After trade this country will import
A) 100 pairs of shoes.
B) 200 pairs of shoes.
C) 300 pairs of shoes.
D) 1,300 pairs of shoes.
Pairs of Shoes
Units of footwear intended to be worn on people's feet, typically sold, bought, or produced in matching sets of two.
Domestic Price
The price of goods or services within a country's borders, unaffected by import or export factors.
Trade Price
The price at which goods or services are traded between parties, often wholesale prices.
- Distinguish between import and export notions within the trade balance framework.
Verified Answer
RB
Rahim BabwaniJun 11, 2024
Final Answer :
C
Explanation :
After trade, the price of shoes falls to $60, which is the world price. At this price, domestic demand is 1,000 pairs (from the demand curve), and domestic supply is 700 pairs (from the supply curve). The difference, 300 pairs, represents the quantity of imports.
Learning Objectives
- Distinguish between import and export notions within the trade balance framework.
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