The diagram below shows the (hypothetical)demand and supply curves for regional jets in Canada.Assume that the market is competitive,all jets are identical,and that Canada engages in international trade. FIGURE 32-6
-Refer to Figure 32-6.Assume the world price of a regional jet is $20 million.How many jets are not produced in Canada that would have been if Canada did not engage in international trade?

Question

The diagram below shows the (hypothetical)demand and supply curves for regional jets in Canada.Assume that the market is competitive,all jets are identical,and that Canada engages in international trade.  FIGURE 32-6
-Refer to Figure 32-6.Assume the world price of a regional jet is $20 million.How many jets are not produced in Canada that would have been if Canada did not engage in international trade?

Quizplus · Accepted Answer

The world price of a regional jet is $20 million. Canada's domestic price is $30 million. Without international trade, Canada would produce 50 jets (at a domestic price of $30 million). With international trade, Canada produces only 10 jets (at a world price of $20 million). Therefore, Canada does not produce 50 - 10 = 40 jets that it would have produced if it did not engage in international trade.

The Diagram Below Shows the (Hypothetical)demand and Supply Curves for Regional