-If the Economy in the Diagram Above Is Open to Trade

question 13

Multiple Choice

-If the economy in the diagram above is open to trade and the world price of oil is $30 per barrel,then this economy will ________ million barrels of oil.

• A) export 6
• B) export 8
• C) export 10
• D) import 10
• E) import 6

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Definitions:

Public Good

An offering of goods or services to society's members at no cost, made available by public institutions or private bodies or individuals, not aiming to generate profits.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available for everyone to use without diminishing their availability to others.

Market Failure

Market Failure occurs when the allocation of goods and services by a free market is not efficient, often requiring intervention.

Social Costs

The total cost to society, both direct and indirect, arising from the production or consumption of goods and services, including externalities.