Asked by giannah alessandra on May 18, 2024
Verified
An import quota does which of the following?
A) Decreases the price of the imported good to the consumer.
B) Increases the price of the domestic good to the consumer.
C) Redistributes income from the domestic producer to the protected domestic exporter.
D) Decreases the price received by the foreign producer.
E) An import quota does all of these things.
Import Quota
A government-imposed limit on the quantity of a particular commodity that can be imported into a country over a specified period of time, used to protect domestic industries.
Domestic Producer
A company or individual that manufactures goods within their home country.
Foreign Producer
A company that produces goods or provides services in a country other than the one where the company is based.
- Study the influence of tariffs, quotas, and various trade restrictions on international trade and national markets.
- Assess the impact of trade policies on the cost to consumers and competitive dynamics within markets.
Verified Answer
KV
Kevin VidesMay 20, 2024
Final Answer :
B
Explanation :
An import quota restricts the quantity of imported goods, which increases the price of the domestic good to the consumer. This happens because the reduced competition allows the domestic producers to charge higher prices. Import quotas do not necessarily decrease the price of imported goods to consumers, redistribute income from domestic producers to exporters, or decrease the price received by foreign producers.
Learning Objectives
- Study the influence of tariffs, quotas, and various trade restrictions on international trade and national markets.
- Assess the impact of trade policies on the cost to consumers and competitive dynamics within markets.