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A quota

Use the scenario to answer the following questions:Suppose that Canada, an industrialized nation, and Mexico, a developing nation, both produce clothes and cars. The real wage in Mexico is lower than in Canada. The countries have a free trade agreement. Each nation will find a comparative advantage. Which country’s consumers will benefit from the free trade agreement?

In the domestic market following the imposition of an import quota, imports ________, domestic production ________, and prices ________.

Which of the following is an important characteristic of good economic models?

A nation will engage in voluntary trade if

An economy that trades with the rest of the world is a(n) ________ economy.

What activity defines a market?

When a foreign supplier sells a good below the price it charges in its home country, this is called

The graph depicts the market for shoes in a particular country. Use the graph to answer the following questions: If this country engages in free trade with other countries, then the price of shoes will be ________ and the quantity of shoes sold to domestic consumers will be ________.

The simple circular flow diagram leaves out some important details. For one thing, in addition to interacting with each other, households and firms also interact with