The above figure shows the U.S. market for 1 carat diamonds. Suppose the United States imposes the import quota shown in the figure. With the import quota, how many diamonds can be imported?
A) 500,000
B) 700,000
C) 400,000
D) 900,000
E) 300,000
C
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The main purpose of most tariffs and quotas is to
A) reduce the foreign competition that domestic firms face. B) improve the quality of goods and services imported into the country. C) raise revenue for the government. D) reduce the prices consumers pay for goods and services.
In an ideal free unregulated market
a. supply curves reflect all negative externalities. b. external benefits are abundant. c. all individual and social needs are met by the market. d. optimal quantities of all goods and services are produced.
Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Smith is
A) advancing the foreign export subsidies argument for protectionism. B) making the mistake of believing that high wages mean high costs. C) advancing the antidumping argument for protectionism. D) making the mistake of believing that productivity is higher in foreign countries than in the United States. E) none of the above
If interest rates are raised
A. people are not affected by interest rates being raised: only when interest rates are lowered. B. entrepreneurs are more likely to expand a business by borrowing money. C. people are less likely to save their money in banks. D. entrepreneurs are less likely to borrow money and expand their businesses.