How does an import quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?
What will be an ideal response?
An import quota raises the price of the good because it decreases the amount that can be imported. As a result, domestic consumption decreases as domestic consumers decrease the quantity they demand. And, also as a result, domestic production increases as domestic producers increase the quantity they supply.
You might also like to view...
Portney's research of the 1990 Clean Air Act Amendments (CAAA) finds that MSC exceeds MSB. Based on this finding, one can conclude that
a. the CAAA are allocatively efficient b. TSC exceed TSB c. these amendments are inefficient but cost-effective d. the CAAA over-regulate society
In modern economies
A) some prices are very flexible while others are not. B) no prices are very flexible. C) all prices are very flexible. D) prices become less flexible as they increase.
The four-firm concentration ratio for an industry is
a. the number of firms in the industry, divided by four. b. the share of industry output sold by the four largest firms in the industry. c. the percentage of total industry profits claimed by the four largest firms. d. the share of industry output sold by the fourth largest firm in the industry.
An example of a(n) ________ comparative advantage is U.S. consumers buying automobiles produced in Japan because Japanese companies have a reputation for producing a higher-quality automobile than those produced in the United States.
A. subsidized B. acquired C. natural D. unwarranted