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-(Figure: The Market for Tea in Sri Lanka) Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁.When the economy is opened to trade,the price rises to P_W.Sri Lanka will _____ tea and the volume of trade will equal _____.

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-(Figure: The Market for Tea in Sri Lanka) Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁.When the economy is opened to trade,the price rises to P_W.Sri Lanka will _____ tea and the volume of trade will equal _____.

Quizplus · Accepted Answer

When the economy opens to trade and the price rises, it indicates that the world price is higher than the autarky price, leading to the country exporting tea. The volume of trade is the difference between the quantity supplied at the world price and the quantity demanded at the world price.

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