Figure: Home's Exporting Industry I

question 127

Multiple Choice

Figure: Home's Exporting Industry I
The graph shows information about a home exporter.
(Figure: Home's Exporting Industry I) According to the
Graph, when the home country provides a subsidy of
_______, exports will increase by _____ units.

• A)$50; 40
• B)$175; 120
• C)$125; 100
• D)$175; 100

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Definitions:

Unit Price

The cost per unit of a product or service, making it easier to compare the value of similar items.

Market Price

The current market price for buying or selling an asset or service in an open exchange.

Purely Competitive

A market structure characterized by many buyers and sellers, homogeneous products, and free entry and exit of firms.

Short Run

A period in which at least one factor of production is fixed, affecting the ability of a business to increase output in response to increased demand.