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 will occur when exports equal imports, as shown by the intersection of the domestic supply and demand curves (points E and B, respectively) with the world price line. This means that the quantity of pasta exported by Pestoland will exactly match the quantity of pasta imported by Pastaland, leading to a balance of trade. Therefore, choice C is the correct answer.

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

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