Refer to the information provided in Figure 33.3 below to answer the question(s) that follow. Figure 33.3
-Refer to Figure 33.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. This would cause the number of pairs of shoes produced domestically to
A) increase.
B) decrease.
C) remain the same.
D) fall to zero.

Question

Refer to the information provided in Figure 33.3 below to answer the question(s) that follow.  Figure 33.3
-Refer to Figure 33.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. This would cause the number of pairs of shoes produced domestically to
A) increase. 
B) decrease. 
C) remain the same. 
D) fall to zero.

Quizplus · Accepted Answer

When the price of shoes becomes cheaper after trade, domestic shoe producers will find it harder to compete with imported shoes. Thus, the domestic shoe producers will likely decrease production or even exit the market, leading to a decrease in the number of pairs of shoes produced domestically.

Refer to the Information Provided in Figure 33