Refer to the information provided in Figure 18.3 below to answer the questions that follow. Figure 18.3
-Refer to Figure 18.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. If shoes are a normal good and income in this country rises, then we would expect

Question

Refer to the information provided in Figure 18.3 below to answer the questions that follow.  Figure 18.3
-Refer to Figure 18.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. If shoes are a normal good and income in this country rises, then we would expect

Quizplus · Accepted Answer

Since shoes are a normal good, an increase in income would lead to an increase in demand for shoes. If the domestic price is higher than the international price, the country is importing shoes. As demand increases due to higher income, the number of shoes imported would also increase to meet this demand.

Refer to the Information Provided in Figure 18