Exhibit 30-2
Reference: Ref 18-6
The government is considering imposing either a tariff that will
restrict export supply according to the data in Exhibit 30-2 or a
quota that limits imports to 8 units. Which of the following is
true?
| Consumers will prefer the quota. |
| The government will collect more revenue with the quota. |
| Producers will prefer the quota. |
| Imports will be higher with the quota. |
| The equilibrium price will be lower with the quota. |
Homework Answers
Option a, because this will limit export to 8 units then price to home consumers will be less and demand will be higher thus the consumers surplus will be higher compared to tariffs
Add Answer to:
Exhibit 30-2
Reference: Ref 18-6
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