Based on the figure above, which of the following factors could lead the demand curve to shift rightward from D0 to D1?
A) a fall in expected future U.S. exchange rate
B) a fall in the U.S. exchange rate
C) a rise in the U.S. interest rate
D) a rise in the U.S. exchange rate
E) a rise in foreign interest rates
C
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The substitution effect indicates that:
A) a decline in money income will cause the consumer to buy more inferior goods and fewer superior goods. B) consumer equilibrium can only be achieved when the consumer is buying substitute goods. C) when the price of a product falls, the lower price will induce the consumer to buy more of that product at the expense of other products. D) when the price of a product falls, a consumer will be able to buy more of it with a specific money income.
How does a quota affect the consumer surplus and the producer surplus from the imported good? Is the overall economy helped or harmed by quotas? Briefly explain your answers
What will be an ideal response?