Asked by
Azzariah Newton
on Dec 12, 2024
Verified
In Figure 17-2, in the absence of trade, the domestic price of shoes is Pn. Since many foreign countries have a comparative advantage in the production of shoes, when the United States begins to trade, the domestic price will fall to the world price. When this happens, what does the quantity Qc through Qp represent?
A) the quantity of shoes that the United States imports
B) an increase in the world consumption of shoes
C) the quantity of shoes that the United States exports
D) a reduction in the world consumption of shoes
Comparative Advantage
The ability of a country or firm to produce a particular good or service at a lower opportunity cost than others.
Domestic Price
The price level of goods and services within a country's border, reflecting the domestic market's supply and demand conditions.
Shoes
Footwear crafted from various materials designed to protect and comfort the human foot while enabling mobility, often reflecting fashion and social status.
- Understand the bearing that cross-border commerce has on domestic market pricing and product availability.
- Recognize the benefits of comparative advantage and the role it plays in international trade.
Verified Answer
IF
Learning Objectives
- Understand the bearing that cross-border commerce has on domestic market pricing and product availability.
- Recognize the benefits of comparative advantage and the role it plays in international trade.