-Refer to the diagram above.If this country imposes an import quota of 500 pairs of shoes per year,then compared to free trade,total economic surplus is ____________________ by ____________________ per year.

Question

Quizplus · Accepted Answer

An import quota reduces the total economic surplus by limiting the quantity of goods that can be imported, leading to higher prices and reduced consumer surplus. The reduction in total economic surplus is typically calculated by the loss in consumer surplus minus any gain in producer surplus and government revenue. In this case, the economic surplus is lower by $3750 per year.

-Refer to the Diagram Above