In deriving an offer curve for a country, if a higher price of exports/price of imports leads to a reduction in the quantity of exports which the country is willing to supply, then, in this range of the offer curve, the offer curve is said to be __________.
A) inelastic
B) unit-elastic
C) elastic
D) inelastic, unit-elastic, or elastic - cannot be determined without more information

Question

Quizplus · Accepted Answer

The offer curve is said to be inelastic in this range because a higher price of exports relative to imports leads to a reduction in the quantity of exports the country is willing to supply, indicating that the country's response in terms of export quantity is less than proportional to the change in price, which is characteristic of inelastic behavior.

In Deriving an Offer Curve for a Country, If a Higher