In March 2014, Canada and South Korea completed a free-trade agreement. In the a

Question

In March 2014, Canada and South Korea completed a free-trade agreement. In the agreement, South Korea eliminated its 20.5 percent tariff on Canadian live lobsters. Prior to the trade agreement, Canada exported 8,500 kilograms of live lobsters to South Korea per year, with an average selling price per kilogram in South Korea of 42,000 won (the currency used in South Korea). With the elimination of the live-lobster tariff, which of the answer choices gives a correct prediction of the amount of live lobsters exported by Canada to South Korea and the average selling price, respectively? A. 8,800 kilograms and 44,000 won B. 9,400 kilograms and 39,500 won C. 8,200 kilograms and 45,600 won D. 7,900 kilograms and 41,750 won

Explanation / Answer

B. 9,400 kilograms and 39,500 won

As, due to the a free-trade agreement, Tariff is removed, thus prices decrease and quantity of export increases.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.