The Price of Domestically Produced Wine in the United States

question 16

Multiple Choice

The price of domestically produced wine in the United States is $15 per liter and the price of the same wine produced in Italy is 12 euros per liter.If the exchange rate is $.96 to the euro and no tariffs or quotas affect the good

• A) the United States will export wine and the U.S. price of wine will rise.
• B) the United States will import wine and the U.S. price of wine will rise.
• C) Italy will export wine and the Italian price of wine will rise.
• D) Italy will import wine and the Italian price of wine will rise.
• E) both countries will produce their own wine and no trade will occur.

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Definitions:

Logical Thinking

The process of using reasoning consistently to come to a conclusion, problem solving and decision making based on a set of given rules.

Reasoning

The process of thinking about something in a logical way in order to form a conclusion or judgment.

Ego

In psychoanalytic theory, the part of the psyche that mediates between the instinctual desires of the id, the moral and social demands of the superego, and reality.

Rule-Oriented

Pertains to systems, behaviors, or activities that are governed by a specific set of rules or protocols.