If Utopia has a closed economy, the number of cases of tile consumed each is ________ per year, and if it has an open economy the number of cases of tile consumed is ________ per year.
A)200; 450
B)300; 200
C)300; 450
D)450; 200

Question

If Utopia has a closed economy, the number of cases of tile consumed each is ________ per year, and if it has an open economy the number of cases of tile consumed is ________ per year. 
A)200; 450 
B)300; 200 
C)300; 450 
D)450; 200

Quizplus · Accepted Answer

In a closed economy, the domestic price is determined by the intersection of domestic supply and domestic demand, which in this example occurs at a price of $20 per case. At that price, 300 cases of ceramic tile are demanded each year. In an open economy, the domestic price becomes the world price, which in this example is $15 per case. At that price, 450 cases of ceramic tile are demanded each year.

If Utopia Has a Closed Economy, the Number of Cases