SCENARIO: FREEDONIAN EXPORTS in the Small Country of Freedonia, the Domestic Demand for Domestic

question 45

Multiple Choice

SCENARIO: FREEDONIAN EXPORTS
In the small country of Freedonia, the domestic demand for
Widgets is represented by P = 100 - 3Q; the home supply
Of widgets is represented by P = 1Q.
Reference: Ref 10­4
(Scenario: Freedonian Exports) Freedonia engages in
International trade in widgets.The world price is $40.How
Many widgets will be consumed domestically and how many
Will be exported?

• A)It will consume 20 domestically and export 20.
• B)It will consume 20 domestically and export 40.
• C)It will consume 40 domestically and export 20.
• D)It will consume zero domestically and export 20.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting in variable cost situations.

Activity Variances

Discrepancies between planned or standard costs to perform an activity and the actual costs incurred.

Jeep Tours

Customized tours offered to tourists that utilize jeeps to navigate terrain that is typically not accessible by standard vehicles, often in natural or adventure settings.

Revenue Variances

The difference between actual revenue and expected revenue over a specific period, often analyzed to understand performance.