# Question 1- The figure shows the domestic supply and domestic demand for copper. Both the autarky...

Question

1-

The figure shows the domestic supply and domestic demand for copper. Both the autarky price and the world price are indicated. If this economy is open to world trade, what quantity of copper will be exported?

a-40,000 pounds

b-70,000 pounds

c-80,000 pounds

d-110,000 pounds

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2-

The figure shows the domestic supply and demand for notebooks. Suppose that the world price is $2 and that a$2 tariff has been imposed. Pw indicates the world price on the graph, and PT indicates the price with the tariff. Once the tariff is imposed, what quantity will be imported?

a-3,000

b-4,000

c-8,000

d-11,000

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3-

(Figure: The Market for Tea in Sri Lanka) Look at the figure The Market for Tea in Sri Lanka. In autarky, the price of tea in Sri Lanka 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; Q1 – QT

d-export; CT – Q1

Price per pound World price \$6 Autarky price 40 Market for Copper Domestic Supply Domestic Demand 80 110 Quantity (thousands of pounds)