Refer to Figure 4.1. If the United States levies no taxes on apples, the price of apples in the United States would fall to , and the United States would import .

A) 20 cents per apple; 10 million apples per day
B) 30 cents per apple; 6 million apples per day
C) 40 cents per apple; 2 million apples per day
D) The price of apples in the United States after the U.S. government eliminated all taxes on imported apples cannot be determined from this information.

Question

Refer to Figure 4.1. If the United States levies no taxes on apples, the price of apples in the United States would fall to ________, and the United States would import ________.

A) 20 cents per apple; 10 million apples per day
B) 30 cents per apple; 6 million apples per day
C) 40 cents per apple; 2 million apples per day
D) The price of apples in the United States after the U.S. government eliminated all taxes on imported apples cannot be determined from this information.

Aizhan Iskakova · Accepted Answer

Final Answer : B, Explanation :  Without taxes, the price would fall to the world price of 30 cents per apple, and the U.S. would import the difference between domestic demand and supply at that price, which is 6 million apples per day.

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