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 a trade restriction on the importation of coffee, the supply of coffee would decrease, causing the U.S. price of coffee to increase. This is due to the decrease in supply causing an increase in demand and therefore a higher price. This would also likely lead to a decrease in U.S. consumption of coffee.

During the First 6 Months of 2008, the United States