Figure 81 Depicts the Supply and Demand Schedules of Calculators for for Greece

question 16

Multiple Choice

Figure 8.1 depicts the supply and demand schedules of calculators for Greece, a "small" country that is unable to affect the world price. Greece's supply and demand schedules of calculators are respectively depicted by SG and DG. Assume that Greece imports calculators from either Germany or France. Suppose Germany is the world's low-cost producer who can supply calculators to Greece at $20 per unit, while France can supply calculators at $30 per unit.

Figure 8.1. Effects of a Customs Union

-According to Figure 8.1, the formation of a Greece/Germany customs union would result in

• A) $20 of trade diversion.
• B) $40 of trade diversion.
• C) $20 of trade creation.
• D) $40 of trade creation.

Analyze the influence of economic growth on environmental performance and sustainability.

Discuss the role of innovative technologies (e.g., fracking) in changing the dynamics of energy supply.

Explore the importance of forests for ecological balance and the economic factors affecting deforestation and forest conservation.

Understand and explain the future trends in resource demand.

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Definitions:

Supply

The total amount of a product or service that is available for consumers.

Demand

The quantity of a product or service that consumers are willing and able to buy at various prices during a certain period.

Competitive Market

A market structure characterized by a large number of buyers and sellers, homogeneous products, and ease of entry and exit, which leads to price tending towards marginal cost.

Supply And Demand

The economic model that determines the price of anything in a market, based on the quantity available and the desire of consumers for it.