(Figure: Interpreting a Market Graph) If the Price of Leather

question 164

Multiple Choice

(Figure: Interpreting a Market Graph) If the price of leather used to make shoes falls in price such that the supply of shoes increases by 20 shoes at every price, then the amount of shoes supplied at a price of $60 before the change would be _____ pairs, and after the change, it would be _____ pairs.

• A) 30; 50
• B) 20; 40
• C) 10; 30
• D) 40; 60

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Definitions:

Quota Rent

The earnings that accrue to the licensee from the difference between the domestic price and the world price of an imported good when imports are limited by a quota.

Government Imposes

Actions taken by a government to enforce regulations, taxes, or penalties on citizens and businesses.

Shrimp Market

The market or industry segment concerning the buying, selling, and trading of shrimp as a commodity or food product.

Quota Limit

A government-imposed trade restriction that sets a physical limit on the quantity of a good that can be imported or exported during a specific time frame.