Option A is correct . Import quota imposed by the importing country tends to raise the price of foreign good in domestic economy because of which consumer suffers and end up paying higher prices with less demand .
Question 8 1pts The effect of an import quota is to O raise the price and...
QUESTION 8 Both tariffs and import quotas increase the quantity of imports and raise the domestic price of the good. increase the quantity of imports and lower the domestic price of the good. decrease the quantity of imports and raise the domestic price of the good. decrease the quantity of imports and lower the domestic price of the good.
QUESTION 17 A trade quota is O a restriction on the quantity of goods that can be imported O a tax on imports O a tax on exports the restriction of trade through regulations on domestic producers QUESTION 18 A tariff on a good when the world price is lower than the domestic price leads to O tariff revenues that will be lower than under free trade domestic imports that will be higher than under free trade lower domestic consumption...
1. From the importing country’s point of view, a tariff is better than a quota because a. a tariff has a smaller effect on imports than does a quota.b. a tariff has a larger effect on imports than does a quota.c. the tariff generates tax revenue for the government.d. both reduce imports but only quotas increase price.
The deadweight loss associated with an import tariff is smaller than a quota of the same impact because Cannot be determined from the information The government receives revenue from the tariff and not the quota. Price increases more with a tariff, O Quantity decreases more with a quota. The government receives revenue from the quota and not the tariff.
1. 2) The deadweight loss associated with an import tariff is smaller than a quota of the same impact because ________________. a. The government receives revenue from the quota and not the tariff. b. Price increases more with a tariff. c. Quantity decreases more with a quota. d. The government receives revenue from the tariff and not the quota. e. Cannot be determined from the information 3) Will this firm shutdown? Q = 5 Price: $30 MC = $10 AVC...
(a) Home Market (b) Import Market Price Price Deadweight loss due to the tariffb+d S, S2 D2D Quantity Imports FIGURE 8-5 Effect of Tariff on Welfare The tariff increases the price from PW to pW+ t. As a result, consumer surplus falls by (a + b+ c+ ). Producer surplus rises by area a, and government revenue increases by the area c. Therefore, the net loss in welfare, the deadweight loss to Home, is (b + a), which is measured...
A decrease in the import tariff will result in Question options: an increase in imports but a decrease in domestic production. a decrease in price and a decrease in quantity purchased. a decrease in imports but an increase in domestic production. an increase in price but a decrease in quantity purchased. Which of the following is NOT a rationale for tariffs? Question options: They improve the terms of trade for small and large nations. They promote a level playing field...
w a s Chapter 62006%20Trade%20Exercises%20Winter%202020%20Exercise%20-%201CM.pdf Open Economy (International Trade) The domestic Maize Market for a small closed economy of country XYZ is shown in the model below, and world price is $10/ton. Suppose the government of country XYZ decides to add tariff ($4/ton of import maize) to reduce imports. The model is shown below: Maize Market with Tariff S(domestic) Price/ton Domestic Price (with tariff) -- World Price Ddomestic) 32 35 4 5 25 30 18 20 22 Quantity of tons...
Examples: (10 points each) . A "small" country is unable to affect world price. It imports peanuts at the price of USD 20 per bag Demand curve D 450 -8P Supply curve: S-20+4P a) Determine the free trade equilibrium (the amount of import under free trade) b) Calculate the effect of an import quota that limits imports to 100 bags
7. A small country imports sugar. With free trade at the world price of $0.10 per pound, the country’s national market is: The country’s government now decides to impose a quota that limits sugar imports to 240 million pounds per year. With the import quota in effect, the domestic price rises to $0.12 per pound, and domestic production increases to 160 million pounds per year. The government auctions the rights to import the 240 million pounds. Calculate how much domestic...