If an Import Quota Is Imposed on Imports of Shrimp

question 262

Multiple Choice

If an import quota is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will ________ and U.S.total surplus from shrimp will ________.

• A) increase; increase
• B) increase; decrease
• C) decrease; increase
• D) decrease; decrease
• E) increase; not change

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Definitions:

Cash Dividends

Direct payments of profit made to shareholders, proportionate to the number of shares they own.

Treasury Stock

Shares that were first put into circulation by a company and then taken back, diminishing the quantity of shares actively traded on the market.

Small Stock Dividend

A dividend paid in the form of additional shares of the issuing corporation, typically representing less than a 25% increase of the outstanding shares.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its owners as dividends.