When free trade is allowed, the price of steel in this country is ______ and dom
ID: 1218321 • Letter: W
Question
When free trade is allowed, the price of steel in this country is ______ and domestic consumers purchase ______ tons of steel.
$850; 60
$590; 60
$590; 140
$850; 100
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1 pts
When the country allows free trade, the country ________ a quantity of ______ tons of steel.
exports; 40
imports; 80
exports; 60
imports; 60
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1 pts
With free trade, consumer surplus is _________, and producer surplus is _________, than if the country did not engage in free trade.
lower; lower
lower; higher
higher; lower
higher; higher
Explanation / Answer
1. WHEN FREE TRADE IS ALLOWED, THE PRICE OF STEEL IN THIS COUNTRY IS $590 AND DOMESTIC CONSUMERS PURCHASE 140 TONS OF STEEL.
2. WHEN THE COUNTRY ALLOWS FREE TRADE, THE COUNTRY IMPORTS A QUANTITY OF 80 TONS OF STEEL.
WIT THE FREE TRADE, CONSUMER SURPLUS IS HIGHER,AND PRODUCER SURPLUS IS LOWER, THAN IF THE COUNTRY DID NOT ENGAGE IN FREE TRADE.