Refer to the information provided in Figure 20.3 below to answer the question(s) that follow. Figure 20.3
-Refer to Figure 20.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70. This would cause
A) the number of pairs of shoes imported into this country to increase.
B) the number of pairs of shoes imported into this country to decrease.
C) the number of pairs of shoes exported from this country to increase.
D) the number of pairs of shoes exported from this country to decrease.

Question

Refer to the information provided in Figure 20.3 below to answer the question(s) that follow.  Figure 20.3
-Refer to Figure 20.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70. This would cause
A) the number of pairs of shoes imported into this country to increase. 
B) the number of pairs of shoes imported into this country to decrease. 
C) the number of pairs of shoes exported from this country to increase. 
D) the number of pairs of shoes exported from this country to decrease.

Quizplus · Accepted Answer

When domestic production costs fall, leading to a decrease in the domestic price of shoes from $80 to $70, the country becomes more competitive compared to the international price of $60. This reduces the price gap between domestic and international markets, leading to a decrease in imports as domestic products become more attractive to consumers.

Refer to the Information Provided in Figure 20