Suppose a Small Island Nation Imports Sugar for Its Population

question 144

Multiple Choice

Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below. With no subsidy, the equilibrium price of sugar is ______ per ton, and the equilibrium quantity is ______ tons per day.

• A)$1,000; 12
• B)$1,000; 8
• C)$1,500; 12
• D)$1,500; 8

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Definitions:

Optimal Choice

The most efficient allocation of resources or decision making that maximizes benefit or utility for an individual or entity.

Twizzlers

A brand of fruit-flavored candy in the form of twisted ropes, known for its chewy texture.

Normal Good

A good whose demand increases when consumer income rises and decreases when consumer income falls, ceteris paribus.

Consumer

A person or collective that buys products or services for their own consumption and not for making or selling them.