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
-Consider Figure 8.1.With free trade,Greece imports:
Definitions:
Current Liability
A company's debts or obligations that are due within one year, including accounts payable, short-term loans, and taxes payable.
Warranty Liability
The obligation a company assumes when it guarantees the condition of its product and agrees to repair or replace defective products.
FICA Taxes Payable
Liabilities owed by an employer to the federal government for Federal Insurance Contributions Act taxes, typically for Social Security and Medicare.
Current Liabilities
Obligations or debts that a company is expected to pay within one year or within the normal operating cycle of the business, typically including accounts payable and short-term loans.
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