-The above figure shows the Australian market for thongs. With international trade, the equilibrium price in Australia is ________ and Australia ________ thongs.

Question

Quizplus · Accepted Answer

With international trade, if the world price is below the domestic equilibrium price, the country will import the good. Since the equilibrium price with international trade is $12, which is lower than the domestic equilibrium price without trade, Australia imports thongs at this price.

-The Above Figure Shows the Australian Market for Thongs