Assume that Country A has a population of 500000 and onlyproduces 1 good: cars.

Assume that Country A has a population of 500000 and onlyproduces 1 good: cars. Country A produces 100000 cars per year.The people in Country A purchase 90000 cars but there are notenough cars to fulfill all the demand. They decide to import 50000more. The government buys 25000 cars for its police force and10000 cars are bought by companies to transport employees to otherlocations to work. They also export 65000 cars to nearby countriesfor sale. Discuss the following: