Figure 9-18

question 136

Multiple Choice

Figure 9-18.On the diagram below,Q represents the quantity of peaches and P represents the price of peaches.The domestic country is Isoland.
-Refer to Figure 9-18.If Isoland allows international trade and if the world price of peaches is $3,then

• A)Isoland has a comparative advantage,relative to other countries,in producing peaches.
• B)Isoland will export peaches.
• C)producer surplus with trade exceeds producer surplus without trade.
• D)consumer surplus with trade exceeds consumer surplus without trade.

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Definitions:

Merchant

A person or company involved in the trade of goods, services, or commodities for profit.

Sale

The passing of title from a seller to a buyer for a price.

Implied Warranty of Fitness

An assurance, typically not expressly stated, that a product will be suitable for its intended purpose.

Particular Purpose

A specific objective or requirement for which goods or services are intended or needed, as expressed in a contract.