During the first 6 months of 2008, the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. What would be a potential consequence of such a trade restriction?

Question

Quizplus · Accepted Answer

If the United States places trade restrictions on the importation of coffee, the supply of coffee will decrease, leading to an increase in the U.S. price of coffee. This is because the import restriction would limit the supply of coffee available to U.S. consumers, causing them to bid up the price of the available coffee. The other options are not consistent with the economic theory of trade and the effects of trade restrictions.

During the First 6 Months of 2008, the United States