Suppose That at the Current World Price Bananas Are Imported

question 110

Multiple Choice

Suppose that at the current world price bananas are imported into Canada. Suppose also that domestic supply is perfectly inelastic and domestic demand has unit elasticity. If Canada were to place a tariff on imported bananas, the

• A)price of bananas in Canada would rise, but total domestic expenditures would fall.
• B)quantity imported would be unaffected.
• C)quantity imported would rise.
• D)price of bananas in Canada would rise, but total domestic expenditures would be unaffected.
• E)revenues of the foreign exporters of bananas would rise.

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