The Following Figure Shows the Domestic U

question 94

Multiple Choice

The following figure shows the domestic U.S.market for bananas and the global market for bananas.The domestic supply curve is given by SUPPLY_US.With free trade,the equilibrium output in the U.S.market is Q.The import quota imposed by the government is equal to 0A.
Figure 10-5
-Refer to Figure 10-5.Given that trade in bananas is free from any restrictions,which of the following would be true if P₅ was lesser than P₃?

• A)The domestic demand for bananas would be fully satisfied through imports.
• B)The U.S.would not import bananas;domestic demand would be satisfied by domestic production.
• C)Domestic producers would be worse off and foreign producers would be better off.
• D)Domestic consumers would lose surplus as they would have to pay a higher domestic price.

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Definitions:

Coefficient of Determination

Denoted as R-squared, it measures the proportion of the variance in the dependent variable that is predictable from the independent variable(s) in a regression model.

Regression Line

A line that best fits the data points in a scatter plot, showing the relationship between two variables.

Variation

The extent to which data points in a statistical distribution or data set diverge from the average or mean.

Coefficient of Determination

A statistical measure, usually represented as R^2, that indicates the proportion of variance in the dependent variable predictable from the independent variables.