Suppose That the Free-Trade Offer Curve of Country I Is

question 21

Multiple Choice

Suppose that the free-trade offer curve of country I is drawn with country I's exports of good A on the horizontal axis and country I's imports of good B on the vertical axis. If country I now places an import quota of 100 units of good B, country I's offer curve

• A) will have its normal free-trade appearance up to 100 units on the vertical axis and then will become a horizontal line back to the vertical axis.
• B) will have its normal free-trade appearance up to 100 units on the horizontal axis and then will become a vertical line going upward and parallel to the vertical axis.
• C) will shift to the left or vertically upward by 100 units at each level of exports of good A.
• D) will shift to the right or vertically downward by 100 units at each level of exports of good A.

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Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities; often referred to as stockholders' equity or owners' equity.

Owners

Individuals or entities that hold ownership in a company, possessing rights to its assets and profits.

Total Assets

The sum of all owned resources with economic value that are expected to provide future benefits to a business.

Statement Of Financial Position

A financial statement that shows the assets, liabilities, and equity of an entity at a specific point in time, providing a snapshot of its financial condition.