Figure 81 Depicts the Supply and Demand Schedules of Calculators for for Greece

question 16

Multiple Choice

Figure 8.1 depicts the supply and demand schedules of calculators for Greece, a "small" country that is unable to affect the world price. Greece's supply and demand schedules of calculators are respectively depicted by SG and DG. Assume that Greece imports calculators from either Germany or France. Suppose Germany is the world's low-cost producer who can supply calculators to Greece at $20 per unit, while France can supply calculators at $30 per unit.

Figure 8.1. Effects of a Customs Union

-According to Figure 8.1, the formation of a Greece/Germany customs union would result in

• A) $20 of trade diversion.
• B) $40 of trade diversion.
• C) $20 of trade creation.
• D) $40 of trade creation.

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Definitions:

Social Distance

The perceived or desired level of emotional or physical space between individuals or within social groups.

Intercultural Contact

Interaction between individuals from different cultures, leading to an exchange of values, ideas, and traditions.

Relative Deprivation

The experience of feeling deprived of something to which one believes they are entitled, compared to others or their own expectations.

Acculturation

The process whereby individuals learn about the rules of behavior characteristic of another culture.