The figure below shows the demand (D) and supply (S) curves of a good produced domestically in an economy as well as traded in the international market.Figure 21.1
In the figure,
P₁: Price of the good in the international market.P₂: Price of the good in the domestic market after the imposition of tariff by the government.P₃: No-trade price of the good in the domestic market.

-If the world price of a good is lower than its domestic equilibrium price, the country will:
A)import a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied domestically.
B)export a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied domestically.
C)import a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied by foreign producers.
D)export a quantity of the good equal to the difference between the quantity demanded by foreign consumers and the quantity supplied domestically.
E)import a quantity of the good equal to the difference between the quantity demanded by foreign consumers and the quantity supplied by foreign producers.

In 1992 the EEC Was Replaced by the EU with an Agreement

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