Suppose a Small Island Nation Imports Sugar for Its Population

question 137

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, what is consumer surplus?

• A)$1,000 per day
• B)$4,000 per day
• C)$8,000 per day
• D)$9,000 per day

---

Definitions:

Selling Expenses

Costs incurred directly and indirectly in selling a product, including advertising, shipping, and sales staff salaries.

Merchandise

Goods that have been purchased for resale, typically in a retail environment.

Sales to Total Assets Ratio

A financial metric that measures how efficiently a company is using its assets to generate sales.

Total Assets

The total value of everything a company owns, both current and non-current, as recorded on the balance sheet.