If a Quota Is Imposed on Imports of Prawns into Australia

question 97

Multiple Choice

If a quota is imposed on imports of prawns into Australia, Australian consumer surplus from prawns will ________ and Australian producer surplus from prawns will ________.

• A) increase; increase
• B) increase; decrease
• C) decrease; increase
• D) decrease; decrease
• E) increase; not change

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Definitions:

Net Price

The price of a good or service after deductions such as discounts, rebates, and allowances have been taken into account.

List Price

The manufacturer's suggested retail price (MSRP) or the price at which a product is intended to be sold before any discounts or promotions.

Single Rate

A fixed interest rate that remains constant throughout the term of the loan or investment.

Discount

A reduction applied to the regular price of goods or services, usually offered to encourage purchase or reward customers.