Refer to the Above Diagram, Where S_d and D_d Are

question 150

Multiple Choice

Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and Pc is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is:

• A)the same as that of a tariff of P_cP_t.
• B)the same as that of a tariff of P_tP_a.
• C)the same as that of a tariff of P_cP_a.
• D)to raise price by more and reduce consumption less than a tariff of P_cP_t.

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Definitions:

Straight-Line Method

A process for figuring out depreciation or amortization by spreading the asset’s price evenly over its operational life.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decline in its value over time.

Gain or Loss

The financial result of selling an asset for more or less than its purchase price, respectively.

Fixed Asset Turnover

A financial ratio that measures a company's effectiveness in generating revenue from its fixed assets, such as property, plant, and equipment.