The figure below shows the international market for moped. DM is a country's demand for imports curve and SX is the foreign export supply curve. The importing country now imposes an import quota of 0.9 million, with the licenses given for free to the existing import distributors.
As a result of the quota being imposed on moped imports by this country, the world as a whole will
A. lose $7 million.
B. gain $10 million.
C. gain $31.5 million.
D. lose $17 million.
Answer: D
Economics
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If the cross elasticity of demand between goods A and B is positive
A) the demands for A and B are both price elastic. B) the demands for A and B are both price inelastic. C) A and B are complements. D) A and B are substitutes.
Economics
Which of the following pairs of goods would be expected to have a positive cross-price elasticity of demand?
A) coffee and tea. B) gasoline and large SUVs. C) tennis racquets and tennis balls. D) hot dogs and hot dog buns.
Economics