Suppose that Norway is a small country and currently produces 100,000 board feet of lumber at $600 per 1,000 board feet. Then it begins to trade at the world price of $500 per 1,000 board feet. As a result of trade, Norway's production falls to 50,000 board feet and its consumption increases to 200,000 board feet. How many board feet of lumber does Norway now import?
A) 250,000 board feet
B) 200,000 board feet
C) 150,000 board feet
D) 100,000 board feet

Question

Quizplus · Accepted Answer

Norway's domestic production has fallen to 50,000 board feet but its consumption has increased to 200,000 board feet. This means that Norway must import 150,000 board feet of lumber to meet its increased demand.

Suppose That Norway Is a Small Country and Currently Produces