Figure 62 Illustrates the Calculator Market for Mexico, Assumed to Be

question 74

Multiple Choice

Figure 6.2 illustrates the calculator market for Mexico, assumed to be a small nation that is unable to influence the South Korean (world) price. Assume the South Korean price to be $60 per calculator.
Figure 6.2. Effects of an Export Subsidy
-Consider Figure 6.2.To help its firms further penetrate export markets, suppose the South Korean government provides them a production subsidy of $20 per calculator.With the subsidy, South Korean firms charge a price of $______________ and export ______________ calculators to Mexico.

• A) $40, 8
• B) $40, 10
• C) $20, 8
• D) $20, 10

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