Use the Following to Answer Question

question 49

Multiple Choice

Use the following to answer question:
-(Figure: The Market for Oranges in South Africa) Use Figure: The Market for Oranges in South Africa.In autarky,the price of oranges in South Africa is P₁.When the economy is opened to trade,the price falls to P_W and the change in total surplus is area:

• A)O.
• B)O + P.
• C)M + N + O + P.
• D)M + N + O + P + Q.

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Definitions:

Semiannually Compounded

A method of compounding interest where the calculation and addition of interest occur twice a year.

Compounded Quarterly

The process in which interest is calculated on the principal and the accumulated interest over a quarter (three months) and is added to the principal for calculating future interest.

Accrued Interest

Interest that has accumulated over a period but has not yet been paid or officially recorded.

Nominal Interest

The stated interest rate of a loan or investment, not accounting for inflation or compounding effects.