Assume that the United States imposes an import quota on Italian shoes.Relative to the equilibrium world price that would exist in the absence of import quotas,the equilibrium price of shoes in the United States will most likely _____ and the equilibrium price of shoes in Italy will most likely _____.

Question

Quizplus · Accepted Answer

Imposing an import quota on Italian shoes would limit the supply of shoes in the United States, leading to an increase in the price of shoes there due to the reduced supply. In Italy, the restriction on exports to the U.S. could lead to an oversupply in the domestic market, potentially decreasing the price of shoes there.

Assume That the United States Imposes an Import Quota on Italian