The graph below indicates the Russian wheat market. The domestic price is Pd and

Question

The graph below indicates the Russian wheat market. The domestic price is Pd and the world price is Pw. If open to international trade, Russia will export wheat there will be a surplus of wheat as the world price the price of wheat in Russia will fall to the world price as Russia begins to import wheat Russian producers will offer more wheat for sale at the lower price "The price of gasoline has been fluctuating due to supply and demand factors" This statement is a positive economic statement is a normative economic statement is only opinion cannot be tested because it is based on value judgments Unemployment means a loss of potential output and consumption for the economy is distributed equally across the whole population measures the number of discouraged workers is measured by the number of people not working, even if they are not seeking work The number of people in the U.S labor force is the sum of the numbers employed and unemployed includes the number of people less than 16 years of age includes the number of discouraged workers is a constant number and doesn't vary over the course of a year Which of the following will shift an economy's production possibilities frontier inward? the unemployment rate increases from 5% to 8% a civil war destroys a large portion of the infrastructure and physical capital the country experiences a recession an increase in the stock of capital-goods Protectionist trade policies benefit everyone by allowing all countries to gain the most mutual benefits from trade attempt to reduce barriers involve government restrictions on imports benefit consumers by reducing the prices of imports The opportunity cost of studying for an accounting exam is zero, because there is no money payment involved based on the grade received on the test the best alternative sacrificed by choosing to study not considered in making a rational choice because if you don't study you will fail Which of the following would not be considered investment in the National Income Accounts? construction of an automobile factory the purchase of a new drill press by Ajax Manufacturing accumulation of inventories experienced by a shoe manufacturer the purchase of IBM stock

Explanation / Answer

Q19. The price of wheat in Russia is Pd.

The world price of wheat in Russia is Pw.

When domestic price is lower than the world price, country generally exports when it enters the international trade.

When domestic price is greater than the world price, country generally imports when it enters the international trade.

In given case, price of wheat (domestic price) in Russia is greater than the World price. So, Russia will import the wheat as it enters the international trade.

Moreover, as world price will prevail in Russia once it enters the international trade, price of wheat will fall in Russia as world price is less than the domestic price.

So, the correct answer is option (c).

Q22. Labor force is calculated as follows -

Labor force = Number of employed + Number of unemployed

So, the number of people in US labor force is the sum of the number of employed and unemployed.

Hence, the correct answer is option (a).

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