Figure 8.2 Exporting,Importing and Autarky Equilibrium in the Small Village Bean Market

question 3

Multiple Choice

Figure 8.2
Exporting,Importing and Autarky Equilibrium in the Small Village Bean Market
Panel (a) Panel (b) Panel (c)

-According to Figure 8.2,if we define LIP as the local import price,EP as the external market price,LEP as the local export price,and AP as the autarky price,and if trade with big city were possible,which panel describes a situation where buyers and sellers will chose not trade at all with big city?

• A) Panel a
• B) Panel b
• C) Panel c
• D) That situation is not described by any of the panels

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Definitions:

Scarce Resources

Limited availability of inputs required to produce goods and services, such as labor, land, and capital, necessitating choices and priorities in their utilization.

Unlimited Wants

The concept that human desires and aspirations are endless, which drives continual economic demand and consumption.

Scarce Resources

Natural or man-made assets that are limited in supply, making them valuable for the production of goods and services.

Unlimited Wants

Refers to the insatiable desire of consumers to possess goods and services that provide utility, exceeding the resources available to fulfill them.