When a Country That Imports a Particular Good Imposes an Import

question 181

Multiple Choice

When a country that imports a particular good imposes an import quota on that good,

• A)producer surplus increases and total surplus increases in the market for that good.
• B)producer surplus increases and total surplus decreases in the market for that good.
• C)producer surplus decreases and total surplus increases in the market for that good.
• D)producer surplus decreases and total surplus decreases in the market for that good.

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Definitions:

Substitution Effect

The economic principle that as prices rise or incomes decrease, consumers replace more expensive items with less costly alternatives.

Dr. Pepper

A popular brand of carbonated soft drink, recognized for its unique blend of 23 flavors.

Utility-Maximizing

The economic principle where individuals or firms make choices that lead to the highest level of satisfaction or profit.

Satisfaction

The fulfillment or gratification of a need, desire, or appetite, often used in the context of consumer experiences with goods or services.