-According to the Table Above What Would the Flows of Trade

question 50

Essay

-According to the table above what would the flows of trade be between both countries if the exchange rate were $1 = 2.5 pesos?

---

Definitions:

Inefficient

A term describing processes or allocations of resources that do not maximize output or where inputs are not utilized in the best manner possible.

Marginal Cost

Marginal cost is the change in total cost that arises when the quantity produced is incremented by one unit.

Product-variety Externality

The impact on consumers and producers resulting from an increase or decrease in the variety of products available in the market.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.