-The Figure Above Shows Supply Curves for Soft Drinks

question 305

Multiple Choice

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point b could be the result of

• A) an increase in technology.
• B) a decrease in the relative price of a soft drink.
• C) an increase in the relative price of a soft drink.
• D) an increase in the money price of a soft drink.

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Definitions:

Quota

A government-imposed limit on the amount or value of goods that can be imported or exported during a specified time period, often used to protect domestic industries.

Factor Endowments

The quantity and quality of labor, land, and capital that a country possesses and can utilize for manufacturing.

Free Trade

A policy wherein a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).

Tariffs

Government levies on goods brought into the country.