Distinguish between a voluntary export restraint and a quota
What will be an ideal response?
A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country. A quota is a numerical limit imposed by the government on the quantity of a good that can be imported into a country.
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Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point E)
If the technology to produce motorcycles improves and the number of buyers increases, how will the equilibrium point change? A) The equilibrium point will move from E to C. B) The equilibrium point will move from E to A. C) The equilibrium point will remain at E. D) The equilibrium point will move from E to B.
Identify and define the different types of constraints individuals face while making different choices