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. If shoes are a normal good and income in this country falls, then we would expect
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. If shoes are a normal good and income in this country falls, then we would expect
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

Since shoes are a normal good, a fall in income would lead to a decrease in demand for shoes. If the country is importing shoes (as indicated by the price falling to $60 after trade, suggesting it imports shoes to meet domestic demand at a lower price), a decrease in demand would naturally lead to a decrease in the number of pairs of shoes imported.

Refer to the Information Provided in Figure 20