Suppose a country passes two laws. The first allows 10,000 units of a product to enter the country per year. The second allows any amount of a different product to enter at a tax of $2.00 per unit. The first and second laws create, respectively:

Question

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The first law establishes a quota by limiting the amount of a product that can enter the country per year to 10,000 units. The second law imposes a tariff by charging a $2.00 tax on each unit of a different product that enters the country.

Suppose a Country Passes Two Laws