Figure 18-9

-In Figure 18-9, Pestoland exports pasta to Pastaland.Equilibrium will occur when

Question

Figure 18-9
 
-In Figure 18-9, Pestoland exports pasta to Pastaland.Equilibrium will occur when

Quizplus · Accepted Answer

Equilibrium in international trade occurs when the quantity of exports equals the quantity of imports. In the graph, this intersection occurs at point E, where the world price is equal to the domestic price in both countries, and both countries are producing and consuming at the same level. Therefore, the correct answer is C, where exports equal imports.

Figure 18-9 -In Figure 18-9, Pestoland Exports Pasta to Pastaland.Equilibrium Will Occur