Asked by Elena Martinez on Jun 15, 2024
Verified
If there are no trade restrictions,a country will import a particular good if:
A) domestic quantity supplied equals domestic quantity demanded at the world price.
B) there is excess domestic quantity demanded at the world price.
C) the quantity of the good demanded by the domestic consumers decreases.
D) the quantity of the good supplied by the domestic producers increases.
E) the world price of the good is higher than its domestic price.
World Price
The worldwide market value of a product or service, established by the universal demand and supply.
Trade Restrictions
Measures imposed by governments to control the flow of goods and services across borders, including tariffs, quotas, and import bans, often with the aim of protecting domestic industries.
Quantity Supplied
The total amount of a good or service that producers are willing and able to sell at a specific price over a defined period of time.
- Determine the circumstances that lead to a country importing or exporting a particular product.
Verified Answer
CP
Celina ProutyJun 19, 2024
Final Answer :
B
Explanation :
If there are no trade restrictions, a country will import a particular good if there is excess domestic quantity demanded at the world price. This is because consumers are willing to pay the world price for the good, which is lower than the domestic price, and producers in other countries can supply the good at a lower cost than domestic producers. Therefore, importing the good increases consumer surplus and economic welfare.
Learning Objectives
- Determine the circumstances that lead to a country importing or exporting a particular product.