The import demand curve shows the amount of the home country's:
a. surplus at various prices below the no-trade equilibrium.
b. shortage at various prices below the no-trade equilibrium.
c. equilibrium no-trade quantity demanded.
d. surplus at various prices above the no-trade equilibrium.
e. shortage at various prices above the no-trade equilibrium.
QUESTION 2Why does the elasticity of demand for a commodity change over time?
QUESTION 3The market power enjoyed by a particular producer depends on the number of firms in the industry.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4A perfectly competitive, increasing cost industry is initially in long run equilibrium. Then, there is an increase in demand. Compared with the initial equilibrium, once the new long run equilibrium is reached:
a. price will be higher and total output will be greater than before.
b. price will be the same and total output will be greater than before.
c. price will be lower and total output will be greater than before.
d. price will be higher, and therefore total output will be smaller than before.
QUESTION 5If the world price is below the domestic no-trade equilibrium price, then with international trade:
a. the domestic shortage can be eliminated by rationing.
b. the domestic surplus can be consumed at home.
c. the domestic surplus can be exported to the rest of the world.
d. the domestic quantity demanded is equal to that supplied by the world.
e. the domestic shortage can be met by foreign imports.
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