Question

In the attached graph for a hypothetical country Sugarland, the producer surplus is smallest under which of the following three solutions?
$xid-17310368_1$

a.

Autarky solution

b.

Quota solution

c.

Free trade solution

d.

Both (a) and (b) above

e.

Same in all three solutions

In the attached graph for a hypothetical country Sugarland, what is the estimated value of consumer surplus under quota solution as shown by price Pq?
$xid-17310095_1$

	a.	$1,000.00 million
	b.	$1562.50 million
	c.	$2,250.00 million
	d.	$562.50 million
	e.	$250.00 million

Answer 1

18. Option b.

• The world stock market is the largest market in the world in terms of the value of transactions conducted per a given time period in the world market's.
• It is an exchange rate market which an aggregate of buyer's and sellers of stocks.
• It itself consists of many markets where exchange's or transactions occur regularly in a given time period between the buyers and sellers.

17. Option C.

• The argument that the MacDonald Big Mac hamburger will face similar dollar price in different countries with different currencies is based on the purchasing power parity theory of exchange rate.
• According to this theory, the exchange rate between any two currencies in foreign markets have the same value so that either currencies can be used to purchase the same amount of goods.
• That is, the exchange rates between those currencies equates or depends on the purchasing power of those currencies.