Scenario 9-2 • for a Small Country Called Boxland,the Equation of the of the Domestic

question 282

Multiple Choice

Scenario 9-2
• For a small country called Boxland,the equation of the domestic demand curve for
cardboard is ,
where represents the domestic quantity of cardboard demanded,in tons,and represents the price of a ton of cardboard.
• For Boxland,the equation of the domestic supply curve for cardboard is ,
where represents the domestic quantity of cardboard supplied,in tons,and again
represents the price of a ton of cardboard.
-Refer to Scenario 9-2.Suppose the world price of cardboard is $45.Then,if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

• A)domestic producers of cardboard become better off and domestic consumers of cardboard become better off.
• B)domestic producers of cardboard become better off and domestic consumers of cardboard become worse off.
• C)domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.
• D)domestic producers of cardboard become worse off and domestic consumers of cardboard become worse off.

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Definitions:

Par Value

The face value of a bond or stock as specified by the corporate charter, which is the minimum amount per share that shareholders will receive in the event of the corporation's liquidation.

Market Rate

The current price or cost of goods, services, or commodities as determined by the market supply and demand.

Maturity

The date on which a financial obligation must be repaid in full or the point at which an investment reaches its full value.

Time Period

A specific duration for which financial or operational activities are measured, analyzed, and reported.