Use the Following to Answer Questions

question 131

Multiple Choice

Use the following to answer questions:
Figure: Basic Supply and Demand
-(Figure: Basic Supply and Demand) In the diagram, if the market price is $2, then there is a:

• A) surplus of 60 units.
• B) surplus of 20 units.
• C) shortage of 20 units.
• D) market equilibrium.

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Definitions:

Bilateral Trade Agreements

A trade agreement between just two countries.

Most Favored Nation Clause

A clause applying to members of WTO which states that any deal reached between WTO member countries extends to every other member as well.

Mercantilism

An economic theory and practice dominant in Europe from the 16th to the 18th century, advocating that a nation's prosperity depends upon its supply of capital, and that the global volume of international trade is "unchangeable."

David Hume

David Hume was an 18th-century Scottish philosopher, historian, economist, and essayist known for his influential contributions to empiricism, skepticism, and naturalism in philosophy.