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Cotton Quota (Scenario) Cotton Growers in the Nation of Zanzi Export Nearly 700,000

Question 56

Multiple Choice

Cotton Quota (Scenario)
Cotton growers in the nation of Zanzi export nearly 700,000 bales of cotton every year. Zanzi is the home country for a fabric manufacturing facility that exports high-quality cotton fabric around the world. The government imposed a quota of 1 million bales of cotton that can be imported into Zanzi every year. The local fabric manufacturer is lobbying the government to remove the quota on cotton.
-Which of the following most supports abolishing the cotton quota over maintaining it?


A) The cotton growers have a competitive edge over foreign cotton growers, and they are profitable.
B) The fabric manufacturer, a prime contributor to the nation's annual revenue, can earn better returns by shifting to another country that does not impose cotton quotas.
C) A competing fabric manufacturer is considering opening a production facility in Zanzi.
D) The price of cotton fabric has remained unchanged over the last decade.

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