Asked by Anupama Balaji on Jul 25, 2024
Verified
Refer to Figure 9.5.1 above. With no government interference, the country pictured will:
A) import 500 tons of sugar.
B) import 300 tons of sugar.
C) import 200 tons of sugar.
D) import no sugar.
E) export sugar.
Government Interference
Actions taken by the government to influence the economy or specific industries, which can include regulations, taxes, or subsidies.
Country
A distinct territorial body or political entity recognized as an independent nation.
Sugar
A sweet-tasting, soluble carbohydrate used widely as a sweetener in food and beverages, derived from various sources such as sugarcane and sugar beet.
- Evaluate how tariffs and quotas influence internal production, consumption patterns, the volume of imports, and exports.
Verified Answer
SZ
Serin ZachariahJul 28, 2024
Final Answer :
B
Explanation :
The country will import sugar up to the point where the world price (PW) is equal to the domestic price (Pd). In this case, the world price is $400 per ton and the domestic price is $500 per ton. Therefore, the country will import sugar because it can buy it for a lower price in the world market. The quantity of sugar imported will be the difference between the domestic quantity demanded (600 tons) and the domestic quantity supplied (300 tons) at the world price, which is 300 tons (choice B).
Learning Objectives
- Evaluate how tariffs and quotas influence internal production, consumption patterns, the volume of imports, and exports.