If the world price of steel is greater than the U.S. “no-trade” domestic equilib
ID: 1207352 • Letter: I
Question
If the world price of steel is greater than the U.S. “no-trade” domestic equilibrium price of steel, the United States:
will have a shortage of steel in the domestic market.
will not produce steel.
will supply steel to the rest of the world.
will not trade in steel.
will demand steel from the rest of the world.
a.will have a shortage of steel in the domestic market.
b.will not produce steel.
c.will supply steel to the rest of the world.
d.will not trade in steel.
e.will demand steel from the rest of the world.
Explanation / Answer
c. will supply steel to the rest of the world.
As international price is more than Price in US, US will supply steel to rest of the world.