The figure below shows the domestic supply and demand demand for shoes. As labeled, the no-trade domestic equilibrium occurs at a price of $80 per pair of shoes. If international trade is permitted, the world supply price is labeled at $60 per pair of shoes. PA P = $80 P = $60 S 1,000 1,200 1,300 Number of shoes Suppose the cost of domestic production decreases so that the new equilibrium domestic price of a pair of shoes is $70. As a result, which of the following is true? a. The number of pairs of shoes exported from the country increases b. The number of pairs of shoes exported from the country decreases C. The number of pairs of shoes imported into the country decreases d. The number of pairs of shoes imported into the country increases
The figure below shows the domestic supply and demand demand for shoes. As labeled, the no-trade domestic equilibrium occurs at a price of $80 per pair of shoes. If international trade is permitted, the world supply price is labeled at $60 per pair of shoes. PA P = $80 P = $60 S 1,000 1,200 1,300 Number of shoes Suppose the cost of domestic production decreases so that the new equilibrium domestic price of a pair of shoes is $70. As a result, which of the following is true? a. The number of pairs of shoes exported from the country increases b. The number of pairs of shoes exported from the country decreases C. The number of pairs of shoes imported into the country decreases d. The number of pairs of shoes imported into the country increases
Chapter12: The Partial Equilibrium Competitive Model
Section: Chapter Questions
Problem 12.8P
Related questions
Question
![The figure below shows the domestic supply and demand demand for shoes. As labeled, the no-trade domestic equilibrium
occurs at a price of $80 per pair of shoes. If international trade is permitted, the world supply price is labeled at $60 per pair
of shoes.
P
P₁ = $80-
P = $60
S
1,000 1,200 1,300
Number of shoes
D
Suppose the cost of domestic production decreases so that the new equilibrium domestic price of a pair of shoes is $70. As a
result, which of the following is true?
a. The number of pairs of shoes exported from the country increases
b. The number of pairs of shoes exported from the country decreases
C. The number of pairs of shoes imported into the country decreases
d. The number of pairs of shoes imported into the country increases](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7d8d092a-b738-4db5-9533-897dce711469%2Ff2ad857a-ed55-4ec3-bc13-12fe4617caf2%2Fuu4qgd_processed.png&w=3840&q=75)
Transcribed Image Text:The figure below shows the domestic supply and demand demand for shoes. As labeled, the no-trade domestic equilibrium
occurs at a price of $80 per pair of shoes. If international trade is permitted, the world supply price is labeled at $60 per pair
of shoes.
P
P₁ = $80-
P = $60
S
1,000 1,200 1,300
Number of shoes
D
Suppose the cost of domestic production decreases so that the new equilibrium domestic price of a pair of shoes is $70. As a
result, which of the following is true?
a. The number of pairs of shoes exported from the country increases
b. The number of pairs of shoes exported from the country decreases
C. The number of pairs of shoes imported into the country decreases
d. The number of pairs of shoes imported into the country increases
![The figure below shows the domestic supply and demand demand for shoes. As labeled, the no-trade domestic equilibrium
occurs at a price of $80 per pair of shoes. If international trade is permitted, the world supply price is labeled at $60 per pair
of shoes.
P
P₁ = $80
P = $60
S
1,000 1,200 1,300
Number of shoes
D
Suppose the government implements an import quota of 200 pairs of shoes. Which of the following statements is false?
a. Producers will be made better off.
b. The resulting equilibrium price will be higher than $60.
c. The resulting equilibrium price will be higher than $80.
d. The number of pairs of shoes imported into the country will decrease.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7d8d092a-b738-4db5-9533-897dce711469%2Ff2ad857a-ed55-4ec3-bc13-12fe4617caf2%2F1j5w03_processed.png&w=3840&q=75)
Transcribed Image Text:The figure below shows the domestic supply and demand demand for shoes. As labeled, the no-trade domestic equilibrium
occurs at a price of $80 per pair of shoes. If international trade is permitted, the world supply price is labeled at $60 per pair
of shoes.
P
P₁ = $80
P = $60
S
1,000 1,200 1,300
Number of shoes
D
Suppose the government implements an import quota of 200 pairs of shoes. Which of the following statements is false?
a. Producers will be made better off.
b. The resulting equilibrium price will be higher than $60.
c. The resulting equilibrium price will be higher than $80.
d. The number of pairs of shoes imported into the country will decrease.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Principles of Macroeconomics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781285165912/9781285165912_smallCoverImage.gif)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Economics, 7th Edition (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781285165875/9781285165875_smallCoverImage.gif)
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Macroeconomics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781285165912/9781285165912_smallCoverImage.gif)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Economics, 7th Edition (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781285165875/9781285165875_smallCoverImage.gif)
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Microeconomics](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Economics:](https://www.bartleby.com/isbn_cover_images/9781285859460/9781285859460_smallCoverImage.gif)