The Figure Given Below Shows the Domestic Demand (D_d) and Supply

question 50

Multiple Choice

The figure given below shows the domestic demand (D_d) and supply (S_d) curves of mopeds in a country before an import quota is imposed by the government. After the imposition of quota, the total available supply curve becomes S_d + Q_Q. If the government auctions the quota licenses, the importing nation will:

• A)lose $10 million.
• B)lose $29.75 million.
• C)gain $31.5 million.
• D)gain $21.5 million.

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Definitions:

Annual Percentage Rate

APR, a measure that reflects the cost of borrowing on an annual basis, incorporating not just the interest rate but also any fees and other charges involved.

Quoted Loan Rates

The interest rates that lenders provide to potential borrowers when quoting the costs of a loan.

APR

Annual Percentage Rate, a measure used to compare the annual cost of borrowing or the annual yield from an investment, including interest and fees.