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Questions › JNU › JNU SIS 2015 › Q15
2 marks, −1International Economics › Theories of international trade › Offer curves and reciprocal demandHardabout 3 min

JNU SIS 2015 Question 15: Theories of international trade

Consider the offer curve below where home exports are shown in the horizontal axis and the home imports are shown in the vertical axis : [FIGURE] The elasticity of the import demand then is

Offer curve diagram with home exports E1 on the horizontal axis and home imports E2 on the vertical axis, origin O. A convex offer curve starts at O, rises slowly and then turns steeply upward; a straight line is tangent to it at a point, meeting the horizontal axis at B, and a vertical line drops from the tangency point to C on the horizontal axis, with B lying between O and C (no numbers shown).
Offer curve diagram with home exports E1 on the horizontal axis and home imports E2 on the vertical axis, origin O. A convex offer curve starts at O, rises slowly and then turns steeply upward; a straight line is tangent to it at a point, meeting the horizontal axis at B, and a vertical line drops from the tangency point to C on the horizontal axis, with B lying between O and C (no numbers shown).

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Consider the offer curve below where home exports are shown in the horizontal axis and the home imports are shown in the vertical axis: [FIGURE] The elasticity of the import demand then is (A) OC/OB (B) OB/BC (C) OC/BC (D) None of the above

Theories of international trade has come up 151 times in 6 exams since 2006.

What this question tests

This question is on Offer curves and reciprocal demand, part of Theories of international trade in International Economics.

The Marshall-Edgeworth diagram that finds the equilibrium terms of trade.

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