During 2005- 2006 Europe imported more than $70 million worth of US long- grain rice. In 2006, the European Union threatened to restrict imports of long- grain rice because traces of genetically modified rice were found mixed in to commercial supplies. What would NOT be an effect in the European rice market if U.S. imports were banned?

Question

Quizplus · Accepted Answer

If U.S. imports of long-grain rice were banned, there would likely not be an increase in long-grain rice consumption in Europe. Without U.S. imports, there would likely be a decrease in the overall supply of long-grain rice available in Europe, which would likely lead to either a decrease in demand (as consumers switch to alternative, non-rice products) or an increase in price (as suppliers raise prices to reflect the decreased availability). European rice production could potentially increase, but it would take time for producers to adjust and ramp up production to meet demand. Therefore, only option C would not be a likely effect of a ban on U.S. imports of long-grain rice.

During 2005- 2006 Europe Imported More Than $70 Million Worth