Figure 9-18

question 197

Multiple Choice

Figure 9-18.On the diagram below,Q represents the quantity of peaches and P represents the price of peaches.The domestic country is Isoland.
-Refer to Figure 9-18.If Isoland allows international trade and the world price of peaches is $5,then

• A)producer surplus will be smaller than it would be if Isoland banned trade.
• B)consumer surplus will be smaller than it would be if Isoland banned trade.
• C)the domestic quantity of peaches demanded will exceed the domestic quantity of peaches supplied.
• D)Isoland will be an importer of peaches.

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Definitions:

Law of Demand

A principle stating that as the price of a product decreases, the quantity demanded increases, and vice versa, all else being equal.

Education Provided

The act or process of imparting or acquiring knowledge, skills, or values through various methods such as schooling, training, or research.

School-age Population

The group within a population that falls within the mandatory schooling age range, typically considered as children and adolescents.

Price Floor

A legally established minimum price for a good, or service. Normally set at a price above the equilibrium price.