Suppose the Domestic Supply (Q^S_{U Demand (Q^D) and Supply (Q^S) in the Rest of the the United}

question 53

Multiple Choice

Suppose the domestic supply (Q^S_U.S.) and demand (Q^D_U.S) for bicycles in the United States are given by the following set of equations: $$\begin{array} { l } Q ^ { \mathrm { S } } \mathrm { U.S } . = 2 \mathrm { P } \\\mathrm { Q } _ { ^\mathrm { D } U . S } = 200 - 2 \mathrm { P } .\end{array}$$ Demand (Q^D) and supply (Q^S) in the Rest of the World are given by the equations: $$\begin{array} { l } Q ^ { S } = P \\Q ^ { D } = 160 - P .\end{array}$$ Quantities are measured in thousands and price in U.S. dollars. After the opening of free trade between the U.S. and the Rest of the World:

• A)neither the U.S.nor the Rest of the World gain from trade.
• B)both countries gain from trade, but the U.S.gains more than the Rest of the World.
• C)both countries gain from trade, but the Rest of the World gains more than the U.S.
• D)the net change in total surplus in the U.S.is zero but the Rest of the World gains.

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Definitions:

Central Vision

The area of vision that allows for sharp, detailed vision straight ahead, primarily processed by the macula of the eye.

Distortions

Alterations or misrepresentations of the original shape or meaning of something.

Hearing Acuity

The sharpness or clarity of hearing, a measure of how well a person can detect sounds of varying frequencies.