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:

Equivalent

An item that holds the same worth, purpose, or significance as another within a given context.

Pay

The total money received by an employee from an employer as compensation for employment, including all bonuses and allowances.

Purchasing Power

The capability of a currency to buy goods or services, expressed as the quantity one unit can acquire.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power.