The imposition of a quota on an imported good Question 94 options: C) Both A and B. B) shifts the supply curve up for the good. A) shifts the demand curve down for the good. D) Not enough information to determine.
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A quota is a limit on the quantity of a good that can be imported into a country. This restriction typically aims to protect domestic industries from foreign competition. Show more…
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Which description of the import quotas trade policy below is wrong? A. The policy changes the quantity of specific goods, so the price changes. B. The net effect of the policy must be negative. C. Governments that implement the policy cannot receive any benefits. D. The policy changes the import price, so the quantity of specific goods changes.
James K.
The graph below shows the market for apricots in the United States, a nation that is open to international trade but is assumed to be a price taker unable to affect the world price of apricots. Market for Apricots 1800 1600 1400 1200 1000 800 600 400 200 Quantity (thousands of tons) a. Using the graph above, how many apricots will the United States import at the world price? thousand tons Now suppose the U.S. government imposes a quota on imported apricots at 40,000 tons. b. Using the graph above, indicate the new market equilibrium with the quota imposed and the domestic quantity supplied (Qs) Instructions: Use the tools provided "New Equilibrium" and "Qs + quota" to indicate the new market price, quantity demanded, and domestic quantity supplied with this quota. c. As a consequence of this quota, how many apricots will the United States import now? thousand tons How many apricots will domestic producers supply? thousand tons d. Given your answers above, who will suffer from this quota? O foreign apricot growers and domestic consumers O foreign apricot growers only O domestic consumers and domestic apricot growers O foreign and domestic apricot growers e. If a stricter quota, such as 30 thousand tons of apricots, was imposed on this market, we would expect O the domestic quantity supplied and domestic quantity demanded to decrease, but the price and imports to increase. O price and the domestic quantity supplied to decrease, but the domestic quantity demanded and imports to increase. O the domestic quantity supplied and domestic quantity demanded to increase, but the price and imports to decrease. O price and the domestic quantity supplied to increase, but the quantity demanded and imports to decrease.
Crystal W.
Farruh T.
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