Consider the Supply Curve for a Product Such as Shipping

question 65

Multiple Choice

Consider the supply curve for a product such as shipping crates,which shows how many crates producers want to sell at each possible price.Alternatively,we could view this supply curve in the following way:

• A)for each quantity of shipping crates,the supply curve shows the economic surplus generated by the provision of that ticket.
• B)for each possible price,the supply curve shows the economic surplus generated by the provision of those crates.
• C)for each quantity of shipping crates,the supply curve shows the extent of market inefficiency and deadweight loss.
• D)for each quantity of shipping crates,the supply curve shows the value that consumers place on that particular crate.
• E)for each quantity of shipping crates,the price on the supply curve shows the additional cost to the producer of supplying that crate.

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Definitions:

Exchange Controls

Restrictions that a government may impose over the quantity of foreign currency demand by its citizens and firms and over the rate of exchange as a way to limit the nation’s quantity of outpayments relative to its quantity of inpayments (in order to eliminate a payments deficit).

Flexible Exchange Rates

Foreign exchange system where the value of currencies is determined by supply and demand in the forex market, without direct government intervention.

Services Trade

The exchange of services between countries, including sectors such as finance, insurance, transport, and tourism.

Goods Trade

The act of buying, selling, or exchanging tangible products between countries or within a country.