Refer to the accompanying figure, which shows the annual domestic supply and annual domestic demand for jeans in a small country. If the world price of a pair of jeans is $40, and this country is open to trade with the rest of the world, then it will ________ pairs of jeans each year.

Question

Refer to the accompanying figure, which shows the annual domestic supply and annual domestic demand for jeans in a small country.  If the world price of a pair of jeans is $40, and this country is open to trade with the rest of the world, then it will ________ pairs of jeans each year.

Quizplus · Accepted Answer

At the world price of $40, domestic consumers will demand 28,000 pairs of jeans each year, and domestic producers will only produce 4,000 pairs of jeans each year, implying that this country will import 24,000 pairs of jeans.

Refer to the Accompanying Figure, Which Shows the Annual Domestic