The Figure Below Shows the Demand (D) and Supply (S)

question 36

Multiple Choice

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3

-The trade-creation effect refers to:

• A)the outcome of a preferential trade agreement that reduces economic efficiency by shifting production to a higher-cost producer.
• B)the effect of an increase in the quantity of imports relative to the effect of a tariff applicable to all imports.
• C)the outcome of a preferential trade agreement that allows a country to obtain goods at a lower cost than is available at home.
• D)the effect of a diversion of production to a country that has comparative advantage due to a free trade agreement.
• E)the effect of a decrease in the quantity of exports relative to the effect of a subsidy applicable to all exports.

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Definitions:

Inventory

The total amount of goods, materials, and products held by a company to support production, fulfill customer orders, and maintain operations.

Fixed Quantity

A set amount of an item or resource that does not vary or change over time.

EOQ

Economic Order Quantity; a formula used in inventory management to determine the optimum number of units to order, minimizing the total costs of inventory.

Fixed Interval

A specific duration of time between actions, such as the scheduled maintenance of equipment or the regular ordering of inventory regardless of the level of existing stock.