The model represents the market for sugar in a small nation.Assume S₁ represents the U.S.domestic supply of sugar and S₂ represents the supply in the U.S.under conditions of free trade
-Refer to Figure 17.2.What does S₃ most likely represent?

Question

The model represents the market for sugar in a small nation.Assume S₁ represents the U.S.domestic supply of sugar and S₂ represents the supply in the U.S.under conditions of free trade

The model represents the market for sugar in a small nation.Assume S<sub>1</sub> represents the U.S.domestic supply of sugar and S<sub>2</sub> represents the supply in the U.S.under conditions of free trade -Refer to Figure 17.2.What does S<sub>3</sub> most likely represent? A) U.S.supply under tariff-restricted trade. B) U.S.supply under quota-restricted trade. C) The result of a foreign country dumping this good on the U.S.market. D) Production possibilities under conditions of free trade.

-Refer to Figure 17.2.What does S₃ most likely represent?

Quizplus · Accepted Answer

S3 represents the U.S. supply under tariff-restricted trade because it is the supply curve that is shifted to the left of the free trade supply curve (S1). This is because a tariff makes it more expensive for U.S. producers to produce the good, so they will supply less of it at any given price.

The Model Represents the Market for Sugar in a Small