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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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