Economics Micro & Macro (CliffsAP)

Free-Response Answers

1. A.

B.When imports are allowed into the coffee industry, there is going to be a larger supply of coffee; this larger

supply of coffee also accounts for a lower price for the coffee in the market. These points can be seen in the graph

as quantity QIand price PI. When the market for coffee is regulated and imports are not allowed, there is going to

be less coffee available in the market, and at this lower quantity there is going to be a higher price for coffee.

These points can be seen in the graph as quantity QNand price PN.

C. (i)

Q* Quantity

S

D

P*

Price

QN QI Quantity

Supply without imports

Supply with imports

PI

PN

Price

Part IV: AP Macroeconomics & Microeconomics Tests