Which of the Following Is True of a Quota in a Competitive

question 69

Multiple Choice

Which of the following is true of a quota in a competitive market?

• A)A quota increases total surplus as the quantity produced and consumed in the domestic market increases.
• B)A quota is a trade policy used to promote greater efficiency in production within world markets.
• C)A quota reduces the welfare of domestic consumers more than it increases the welfare of producers.
• D)A quota is imposed in a competitive market to increase total world output of goods and services.

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Definitions:

Corporate Shareholders

Individuals or entities that own shares in a corporation, giving them a claim on a portion of its assets and earnings.

Incompetent Management

Refers to a scenario where corporate or organizational leaders lack the skills, abilities, or judgment to make effective decisions, often leading to poor performance.

Proxy Fights

Strategies employed by shareholders to influence company management and policies by voting on corporate issues, often seen in contests for control of the board.

Nonfinancial Businesses

Companies whose primary activities involve the production or supply of goods and services, rather than financial transactions and investments.