The Following Figure Shows the Demand Curve, D, and the Supply

question 161

Multiple Choice

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia. The world price of calculators is $40.

-Refer to the figure above.Which of the following best describes a method to compensate the group that was made worse off when Barylia opened to free trade?

• A) The buyers could be taxed and the tax revenue used to compensate the sellers.
• B) The sellers could be taxed and the tax revenue used to compensate the buyers.
• C) Barylia could sell the calculators at a price below the domestic equilibrium price in the global market.
• D) Barylia could sell the calculators at a price above the world price in the global market.

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Definitions:

Embargo Act

Legislation passed in 1807 by the United States Congress, prohibiting American ships from trading in all foreign ports to avoid conflicts.

Devastating

Causing severe shock, distress, or destruction.

Pan-Indian Movement

A social and political movement among Indigenous peoples in the Americas aimed at promoting unity and common interests across tribal lines.

Tecumseh

A Native American leader of the Shawnee who played a major role in the early 19th century in resisting the expansion of the United States into native territory.