Exhibit 33-2

-Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is P_W. At this price, what quantity of this good do U.S. consumers buy from U.S. producers and what quantity do they import from foreign producers?

Question

Exhibit 33-2

-Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is P_W. At this price, what quantity of this good do U.S. consumers buy from U.S. producers and what quantity do they import from foreign producers?

Quizplus · Accepted Answer

At the world price P_W, U.S. producers supply Q₁ and U.S. consumers demand Q₃. The difference, (Q₃ - Q₁), is imported from foreign producers.

Exhibit 33-2 ​

Exhibit 33-2