Figure 8.1 depicts the supply and demand schedules of calculators for Greece, a "small" country that is unable to affect the world price. Greece's supply and demand schedules of calculators are respectively depicted by SG and DG. Assume that Greece imports calculators from either Germany or France. Suppose Germany is the world's low-cost producer who can supply calculators to Greece at $20 per unit, while France can supply calculators at $30 per unit.
Figure 8.1. Effects of a Customs Union
-Referring to Figure 8.1, suppose Greece forms a customs union with France.Greece will import
A) three calculators at a per-unit price of $30.
B) three calculators at a per-unit price of $40.
C) six calculators at a per-unit price of $30.
D) six calculators at a per-unit price of $40.
Correct Answer:
Verified
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