-If Australia Starts to Import a Good That Had Previously

question 3

Multiple Choice

-If Australia starts to import a good that had previously been produced in Australia, the market price of the good in Australia

• A) rises.
• B) falls.
• C) remains constant.
• D) either remains constant or rises, depending on whether the supply of the good stays the same or increases.
• E) There is not enough information to answer the question because we need to know if the market price in Australia had been above or below the world market price before trade began.

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Definitions:

Future Economic Benefit

An advantage or profitable impact expected to be achieved in future periods from an asset.

Assets

Resources owned or controlled by a business that are expected to produce economic value.

Liabilities

Financial obligations or debts that a company owes to external parties, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Creditors

Individuals or entities that are owed money by a debtor because they have provided goods, services, or loans.