Suppose the domestic price (no-international-trade price)of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will

Question

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The United States will import copper because the world price of copper ($1.00) is lower than the domestic price ($1.20). This makes it cheaper for the United States to buy copper from the world market rather than produce it domestically.

Suppose the Domestic Price (No-International-Trade Price)of Copper Is $1