-Refer to Exhibit 34-2

question 136

Multiple Choice

-Refer to Exhibit 34-2.The U.S.demand and supply for a good are shown.Under a policy of free trade,the world price is P_W.At this price,what quantity of this good do U.S.consumers buy from U.S.producers and what quantity do they import from foreign producers?

• A) Q₁ from U.S.producers and (Q₃ - Q₁)from foreign producers
• B) Q₂ from U.S.producers and (Q₃ - Q₁)from foreign producers
• C) (Q₃ - Q₁)from U.S.producers and Q₁ from foreign producers
• D) Q₃ from U.S.producers and nothing from foreign producers

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Definitions:

Declining Industry

An industry experiencing a long-term drop in output, sales, or employment.

Lagging Technology

Technology that is behind the current standard or trend, often outdated or rendered obsolete by new innovations.

Inelastic Nature

A characteristic of a good or service whose demand does not significantly change with the price.

Agricultural Demand

The total demand for agricultural products, influenced by factors such as population growth, income levels, and dietary preferences.