Refer to the information provided in Figure 33.3 below to answer the question(s) that follow. Figure 33.3
-Refer to Figure 33.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70. This would cause
A) the number of pairs of shoes imported into this country to increase.
B) the number of pairs of shoes imported into this country to decrease.
C) the number of pairs of shoes exported from this country to increase.
D) the number of pairs of shoes exported from this country to decrease.

Question

Refer to the information provided in Figure 33.3 below to answer the question(s) that follow.  Figure 33.3
-Refer to Figure 33.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70. This would cause
A) the number of pairs of shoes imported into this country to increase. 
B) the number of pairs of shoes imported into this country to decrease. 
C) the number of pairs of shoes exported from this country to increase. 
D) the number of pairs of shoes exported from this country to decrease.

Quizplus · Accepted Answer

If the domestic price of shoes falls to $70 due to a fall in production costs, the domestic price is now lower than the international price of $60. As a result, domestic producers can now compete with the foreign producers and there is no longer a need to import shoes. Therefore, the number of pairs of shoes imported into this country will decrease.

Refer to the Information Provided in Figure 33