Asked by Johanna Lissette Veloz Segarra on Jun 13, 2024
Verified
(Figure: The Market for Tea in Sri Lanka) Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P1.When the economy is opened to trade,the price rises to PW.Sri Lanka will _____ tea and the volume of trade will equal _____.
A) import;QT - CT
B) export;QT - CT
C) import;QT - Q1
D) export;Q1 - CT
Autarky
is an economic system or policy of self-sufficiency where a country does not engage in international trade, relying instead on its own resources.
International Trade
The exchange of goods and services between countries, often influenced by regulations, tariffs, and global economic conditions.
Volume of Trade
The total amount of stocks, securities, or commodities that are bought and sold over a specific period of time.
- Analyze the impact of international trade on domestic industries, including the export and import sectors.
- Analyze the situations in which nations decide to trade goods, based on the prices within their own borders and worldwide.
Verified Answer
YV
Yasmine VickersJun 15, 2024
Final Answer :
B
Explanation :
When the economy opens to trade and the price rises, it indicates that the world price is higher than the autarky price, leading to the country exporting tea. The volume of trade is the difference between the quantity supplied at the world price and the quantity demanded at the world price.
Learning Objectives
- Analyze the impact of international trade on domestic industries, including the export and import sectors.
- Analyze the situations in which nations decide to trade goods, based on the prices within their own borders and worldwide.