Refer to the information provided in Figure 33.4 below to answer the question(s) that follow. Figure 33.4
-Refer to Figure 33.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If there is free trade, this country will import ________ leather wallets.
A) 50
B) 100
C) 200
D) 300

Question

Refer to the information provided in Figure 33.4 below to answer the question(s) that follow.  Figure 33.4
-Refer to Figure 33.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If there is free trade, this country will import ________ leather wallets.
A) 50 
B) 100 
C) 200 
D) 300

Quizplus · Accepted Answer

With free trade, the price of a leather wallet is $10, which is lower than the domestic price of $20. This means the country will import leather wallets to meet the demand at the lower price. The quantity imported will be the difference between the quantity demanded and the quantity supplied domestically at the free trade price. In this scenario, the country will import 200 leather wallets.

Refer to the Information Provided in Figure 33