Question

How would the U.S. Market price of clothing and the quantity sold be impacted with the following changes? Draw a separate diagram for each scenario

              a. Imposing Quotas on the import of foreign clothing

              b. An increase in income of U.S. citizens

c. A decrease in the U.S. industry’s costs of producing U.S. clothing, due to advanced sewing methods.

Answer 1

2 D2 H a DI az X a. a

A.A quota raises the imports price,making imported clothes relatively expensive,and raising the demand for domestically produced clothes.

Price and quantity rises

B.A rise in consumer's income raises their purchasing power.Effect se as A.

C.A fall in production costs raises supply,reducing price and increasing quantity.