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Now suppose South Africa opens up to trade, as in the small-country model. er the country of South Africa, the y of which is the rand. The graphs how two markets: gasoline and iron Suppose the world price for gasoline is 9 rand per liter. South Africa will Select... million liters of gasoline. Market for Gasoline Market for Iron Ore Submit 30 A 27+ 12,000 A 10,000+ Do you know the answer? X Price (rand per metric ton) 8,000 6,000 4,000 I know it Think so Unsure No idea 2.000 1 2 3 4 5 6 7 8 9 10 Quantity (millions of liters) 1 2 3 4 5 6 7 8 9 10 Quantity (millions of metrict

Answer :

South Africa will import 5 million liters of gasoline because Low domestic supply and high domestic demand at world market prices

What is Domestic Supply in Economics?

Quantity of commodities available for domestic consumption or fixed investment, valued at producer prices. It is calculated from domestic production plus imports minus exports minus inventory change.

What is Domestic Demand?

Domestic final demand is the real sum of final consumption, investment and inventory building expenditures by the private and public sectors. Demand for domestic goods refers to the demand for goods produced in our economy, both domestically and abroad. Domestic demand for goods is the domestic demand for goods that can be manufactured abroad.

What is the reason for the expansion of domestic demand?

An increase in overseas production leads to an increase in domestic production. Channels are free: Increased foreign production leads to increased exports of domestic goods, increasing domestic production and domestic demand for goods through a multiplier.

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