Exhibit 17.6

-Refer to Exhibit 17.6, which shows the demand for and the domestic supply of a good in a country. If the world price of the good is $2.00 per unit and an import quota of 50 units per month is imposed, then the gain of the foreign exporters with quota rights is represented by area(s) _____

Question

Exhibit 17.6
 
-Refer to Exhibit 17.6, which shows the demand for and the domestic supply of a good in a country. If the world price of the good is $2.00 per unit and an import quota of 50 units per month is imposed, then the gain of the foreign exporters with quota rights is represented by area(s) _____

Quizplus · Accepted Answer

The gain of foreign exporters with quota rights is represented by the difference between the world price ($2.00) and the domestic price with the quota ($2.50). This difference is shown by the area between points d and c, which is represented by areas c and d in Exhibit 17.6. Thus, the gain is represented by choice E.

Exhibit 17.6 -Refer to Exhibit 17.6, Which Shows the Demand for and the Demand