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Trade - One country model Flashcards | StudBud
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Trade - One country model
Trade - One country model
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StudBud Administration
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Flashcards
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Practice quiz
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Questions
10
Answers
1
State another name for domestic production
Domestic supply
Supply
Market supply
Quantity supplied
2
What will happen to domestic production if costs of production in NZ increases?
Remains constant
Decreases
Increases
3
If domestic demand increases, and domestic supply remains the same, what will importers do?
Sell their products to another country
Increase quantity of imports to fill the shortage
4
If the world price is above the NZ price, what will NZ domestic producers do?
Raise the prices and hope NZ'ers will pay it
Go out of business as a deficit is caused
Keep the price and supply constant
Raise the price and export the surplus
5
How is the new domestic demand curve labelled following a change in demand?
NZD1
NZS1
New NZ demand
New NZ
6
When the World price is below the NZ price why do foreign producers export to NZ?
To give domestic consumers more choice
To get a higher price & make more profit
To flood the NZ market with their products
7
What happens to Domestic production and Domestic consumption when the model applies?
Production falls, consumption falls
Production rises, consumption increases
Production rises, Consumption falls
8
Definition: too small to influence market prices
Price maker
Price taker
Price giver
Price setter
9
what does the One Country Model show the effect of?
The NZ price on the world price when trading occurs
the world price on the NZ price when trading occurs
NZ on the rest of the world
10
What will happen to imports if the costs of production in NZ decrease?
Decrease
Remain constant
Increase
