Figure 34-9

In Figure 34-9, Pestoland exports pasta to Pastaland. Equilibrium will occur when

Question

Figure 34-9

In Figure 34-9, Pestoland exports pasta to Pastaland. Equilibrium will occur when

Quizplus · Accepted Answer

Equilibrium occurs when exports equal imports, as shown by the intersection of the export supply curve (ES) and the import demand curve (ID) at point E. Therefore, the correct answer is C. Choices A and B are incorrect because they suggest that equilibrium occurs at only one point instead of a single intersection point. Choice D is incorrect because maximizing exports may not necessarily result in equilibrium.

Figure 34-9 In Figure 34-9, Pestoland Exports Pasta to Pastaland. Equilibrium Will