07. Under open trade, (a) country 1 will be importing and country 2 exporting 12 units at a price of $10. (b) country 1 will be importing and country 2 exporting 9 units at a price of $11. (c) country 2 will be importing and country 1 exporting 15 units at a price of $11. (d) country 2 will be importing and country 1 exporting 9 units at a price of $14. (e) country 2 will be importing and country 1 exporting 9 units at a price of $11.
07. Under open trade,
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(a) country 1 will be importing and country 2 exporting 12 units at a price of $10. |
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(b) country 1 will be importing and country 2 exporting 9 units at a price of $11. |
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(c) country 2 will be importing and country 1 exporting 15 units at a price of $11. |
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(d) country 2 will be importing and country 1 exporting 9 units at a price of $14. |
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(e) country 2 will be importing and country 1 exporting 9 units at a price of $11. |
"When a country's autarky price for a particular commodity is below the world price/international price (IP) then a country is a importer of that commodity because world price is lesser than the domestic price. When a country's autarky price for a particular commodity is above the world price/international price (IP) then a country is a exporter of that commodity because world price is more than the domestic price."
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