This Graph Demonstrates the Domestic Demand and Supply for a Good,as

question 136

Multiple Choice

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good. According to the graph shown,the area ABC represents consumer surplus in an economy with:

• A) free trade.
• B) autarky.
• C) a tariff being imposed on trade.
• D) None of these is true.

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Definitions:

Illusory Promise

A situation in which a party appears to commit to something but really has not committed to anything. It is not a promise and thus not consideration.

Valid Consideration

Valid consideration in a contract represents something of value that is given by all parties involved, serving as the reason or inducement to enter into the contract.

Adequacy Of Consideration

Refers to the fairness of the bargain in a contract, ensuring that what is exchanged holds reasonable value.

Detriment

A loss or harm suffered as a result of an action or decision.