Figure 9-2

-Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be
A) $10 and 40 baskets will be sold domestically.
B) $10 and 105 baskets will be sold domestically.
C) $7 and 70 baskets will be sold domestically.
D) $7 and 40 baskets will be sold domestically.

Question

Figure 9-2
 
-Refer to Figure 9-2.If this country chooses to trade,the price of baskets in this country will be
A) $10 and 40 baskets will be sold domestically. 
B) $10 and 105 baskets will be sold domestically. 
C) $7 and 70 baskets will be sold domestically. 
D) $7 and 40 baskets will be sold domestically.

Quizplus · Accepted Answer

The price of baskets in this country will be $10 and 40 baskets will be sold domestically. This is because the world price of baskets is $10, and this country can produce baskets at a lower cost than the world price. Therefore, this country will export baskets until the domestic price of baskets falls to the world price.

Figure 9-2 -Refer to Figure 9-2.If This Country Chooses to Trade,the Price