If the United States imposes a tariff on foreign chocolate, how are U.S. buyers of chocolate affected?
A) Their demand for chocolate increases because the U.S. production chocolate increases.
B) The price they pay for chocolate falls, but they consume less chocolate because less is imported.
C) The quantity they consume is unchanged.
D) The price they pay for chocolate falls, and they consume more chocolate.
E) The price they pay for chocolate rises.
E
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The twosector (manufacturing and agriculture) specific factors model assumes:
a. that there are increasing returns to labor. b. that there are diminishing returns to labor. c. that there are diminishing returns to capital in the agricultural sector. d. that there are diminishing returns to land in the manufacturing sector.
Are tariffs and quotas equivalent in their economic effects? Demonstrate
What will be an ideal response?