Figure 9-5

-Refer to Figure 9-5.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country,given that wagons and horses are complements?
A) The quantity of wagons that this country imports would increase.
B) The quantity of wagons that this country imports would decrease, but the country would still be an importer of wagons.
C) This country would switch from being an importer of wagons to an exporter of wagons.
D) The domestic price without trade would move closer to the world price.

Question

Figure 9-5
 
-Refer to Figure 9-5.Bearing in mind that this country is "small," what would happen if there were a decrease in the price of horses within this country,given that wagons and horses are complements?
A) The quantity of wagons that this country imports would increase. 
B) The quantity of wagons that this country imports would decrease, but the country would still be an importer of wagons. 
C) This country would switch from being an importer of wagons to an exporter of wagons. 
D) The domestic price without trade would move closer to the world price.

Quizplus · Accepted Answer

A decrease in the price of horses would increase the demand for horses and, consequently, the demand for wagons, leading to an increase in the quantity of wagons imported.

Figure 9-5 -Refer to Figure 9-5.Bearing in Mind That This Country Is