The figure below depicts the steel market for Portugal, a small nation that is unable to affect the world price. Assume that Germany and France can supply steel to Portugal at a price of $200 and $300, respectively.
Figure 8.2. Portugal's Steel Market
-Consider Figure 8.2.With free trade, Portugal will
A) import 0 tons of steel for Germany and 15 tons of steel from France at $300 per ton.
B) import 25 tons of steel from Germany at $200 per ton and 15 tons of steel from France at $300 per ton.
C) import 15 tons of steel from Germany at $200 per ton and 10 tons of steel from France at $200 per ton.
D) import 25 tons of steel from Germany at $200 per ton and 0 tons from France.
Correct Answer:
Verified
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