The figure below shows the demand (D) and supply (S) curves of a good produced domestically in an economy as well as traded in the international market.Figure 21.1
In the figure,
P1: Price of the good in the international market.P2: Price of the good in the domestic market after the imposition of tariff by the government.P3: No-trade price of the good in the domestic market. 
-If the world price of a good is lower than its domestic equilibrium price, the country will:
A) import a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied domestically.
B) export a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied domestically.
C) import a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied by foreign producers.
D) export a quantity of the good equal to the difference between the quantity demanded by foreign consumers and the quantity supplied domestically.
E) import a quantity of the good equal to the difference between the quantity demanded by foreign consumers and the quantity supplied by foreign producers.
Correct Answer:
Verified
Q18: The table below shows the quantity demanded
Q19: The table below shows the quantity demanded
Q20: The table below shows the quantity demanded
Q21: The figure below shows the demand (D)
Q22: The table below shows the quantity demanded
Q24: The table below shows the quantity demanded
Q25: The figure below shows the demand (D)
Q26: The figure below shows the demand (D)
Q27: The figure below shows the demand (D)
Q28: The figure below shows the demand (D)
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents