How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?
What will be an ideal response?
A 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...
If hiring a minority would drive away customers, then discriminating against that minority might increase profits for the business that is doing the hiring
Indicate whether the statement is true or false
Suppose the Fed increases the money supply. Which of the following is true?
A) At the original interest rate, the quantity of money demanded is less than the quantity of money supplied. B) At the original interest rate, the quantity of money demanded is equal to the quantity of money supplied. C) The interest rate must rise for the money market to clear. D) At the original interest rate, the quantity of money demanded is greater than the quantity of money supplied.