The World Price of a Commodity Will Settle at the Level

question 191

Multiple Choice

The world price of a commodity will settle at the level where

• A)supply and demand are equal within each country.
• B)the excess demand of the importing country is equal to the excess supply of the exporting country.
• C)the excess demand in the exporting country is equal to the excess demand in the importing country.
• D)there is no excess demand in the exporting country.

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Definitions:

Residual Income

The amount of income that an individual or company retains after accounting for all costs and expenses.

Producer Price Index

An economic indicator that measures the average changes in prices received by domestic producers for their output.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.