(a) Explain the slopes of the long-run supply curves in each industry. (b) If Australia and Korea had a free trade agreement, what is likely to happen to the demand curves and the prices in each industry over time?
(a) Explain the slopes of the long-run supply curves in each industry. (b) If Australia and Korea had a free trade agreement, what is likely to happen to the demand curves and the prices in each industry over time?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![QUESTION 18
Note: No referencing is required for short answer questions.
The graphs below show the Australian and Korean domestic car industries.
(a) Explain the slopes of the long-run supply curves in each industry.
(b) If Australia and Korea had a free trade agreement, what is likely to happen to the demand curves and the prices in each industry over time?
Price (thousands of dollars per car)
45
30
Australian car industry
15
SLR
2
Quantity (millions of cars per year)
D
L
Price (thousands of dollars per car)
45
30
Korean car industry
5
2
3
Quantity (millions of cars per year)
D
SLR](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7a811aaa-3243-4dfa-904b-bceaeedb89d1%2F3b0afe08-8387-45b7-8d5a-56f8a09a3227%2F74onbp8_processed.png&w=3840&q=75)
Transcribed Image Text:QUESTION 18
Note: No referencing is required for short answer questions.
The graphs below show the Australian and Korean domestic car industries.
(a) Explain the slopes of the long-run supply curves in each industry.
(b) If Australia and Korea had a free trade agreement, what is likely to happen to the demand curves and the prices in each industry over time?
Price (thousands of dollars per car)
45
30
Australian car industry
15
SLR
2
Quantity (millions of cars per year)
D
L
Price (thousands of dollars per car)
45
30
Korean car industry
5
2
3
Quantity (millions of cars per year)
D
SLR
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