The Graph Shown Demonstrates the Domestic Demand and Supply for a Good

question 117

Multiple Choice

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy decides to open to free trade, the good will:

• A)be imported.
• B)be exported.
• C)no longer be produced domestically.
• D)only be produced domestically, for domestic consumption.

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Definitions:

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Marginal Utility

The added gratification or usefulness experienced from the consumption of an additional unit of a good or service.

Risk-Averse

A characteristic of preferring to avoid risk, often leading to choices that have lower potential returns to minimize possible losses.

Income

Income is the financial earnings received by an individual or entity, typically measured in terms of money earned from employment, investments, or business operations.