The Figure Above Shows the U

question 25

Multiple Choice

The figure above shows the U.S. market for T-shirts, where SUS is the domestic supply curve and DUS is the domestic demand curve. The United States trades freely with the rest of the world. The world price of a T-shirt is $5.
-Based on the figure above,as a result of international trade,consumer surplus

• A) increases by $150 million.
• B) decreases by $150 million.
• C) increases by $90 million.
• D) decreases by $90 million.
• E) remains unchanged.

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Definitions:

Accrued Revenues

Revenues that have been earned (through the delivery of goods or services) but not yet received in cash or recorded.

Goods

Physical items that are produced or purchased for sale by a business.

Deferred Expenses

Costs that have been incurred but not yet expensed in the income statement because they will benefit more than one accounting period.