Assume the Auto Market Is Initially in Equilibrium with Imports

question 41

Multiple Choice

Assume the auto market is initially in equilibrium with imports from Japan taking up a significant share of the market.Now assume a quota on imports of Japanese cars is established.What will occur at the initial equilibrium price to signal market participants regarding the change that has taken place?

• A)A surplus is created by an increase in supply.
• B)A surplus is created by a decrease in demand.
• C)A shortage is created by an increase in demand.
• D)A shortage is created by a decrease in supply.

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Definitions:

Parental Controls

Technologies or software features that allow parents to restrict the access of content to their children to protect them from inappropriate material.

Coumadin Overdose

An excessive intake of Coumadin (Warfarin), a blood thinner, leading to a high risk of bleeding and requiring immediate medical attention.

INR

International Normalized Ratio, a calculation based on prothrombin time to monitor patients on anticoagulant therapy.

Vitamin K

A fat-soluble vitamin that plays a key role in blood clotting and bone metabolism.