Suppose the United Auto Workers union successfully lobbies Congress to enact an import quota on all foreign cars imported into the U.S.Which of the following is most likely to occur in the U.S.?
A)A fall in the price of imported cars and increase in the price of domestics
B)An increase in the demand for domestic cars
C)A decrease in American autoworker wages
D)Higher unemployment among American autoworkers
E)A fall in the demand for imports

Question

Quizplus · Accepted Answer

An import quota would reduce the supply of foreign cars, leading consumers to shift their demand towards domestic cars, thus increasing the demand for domestic cars.

Suppose the United Auto Workers Union Successfully Lobbies Congress to Enact