Exhibit 19-2

-Refer to the graph in the exhibit.Suppose the world price of corn is $2, and no trade restrictions are in place.How many bushels of corn will Canada produce, consume, and export/import?

Question

Exhibit 19-2
 
-Refer to the graph in the exhibit.Suppose the world price of corn is $2, and no trade restrictions are in place.How many bushels of corn will Canada produce, consume, and export/import?

Quizplus · Accepted Answer

Canada will produce at the point where its supply curve meets the world price of $2, which is at 3,000 bushels. It will consume at the point where its demand curve meets the world price, which is at 7,000 bushels. The difference between what it consumes and produces (7,000 - 3,000) is 4,000 bushels, which it will import to meet its consumption needs.

Exhibit 19-2 -Refer to the Graph in the Exhibit.Suppose the World Price