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Refer to the Above Diagram, Where Sd and Dd Are

Question 135

Multiple Choice

  Refer to the above diagram, where S<sub>d</sub> and D<sub>d</sub> are the domestic supply and demand for a product and Pc is the world price of that product.S<sub>d</sub> + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is: A) the same as that of a tariff of P<sub>c</sub>P<sub>t</sub>. B) the same as that of a tariff of P<sub>t</sub>P<sub>a</sub>. C) the same as that of a tariff of P<sub>c</sub>P<sub>a</sub>. D) to raise price by more and reduce consumption less than a tariff of P<sub>c</sub>P<sub>t</sub>. Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.The effect of the import quota on domestic price and domestic consumption is:


A) the same as that of a tariff of PcPt.
B) the same as that of a tariff of PtPa.
C) the same as that of a tariff of PcPa.
D) to raise price by more and reduce consumption less than a tariff of PcPt.

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