Exhibit 19-6

-Refer to the graph in the exhibit.Suppose that the world price is $2.00 per unit.What is the smallest import quota that would NOT affect the level of imports in this country?

Question

Exhibit 19-6
 
-Refer to the graph in the exhibit.Suppose that the world price is $2.00 per unit.What is the smallest import quota that would NOT affect the level of imports in this country?

Quizplus · Accepted Answer

At a world price of $2.00 per unit, the quantity demanded domestically is 150 units per month, and the quantity supplied domestically is 50 units per month. The difference, 100 units per month, represents the level of imports without any quota. Therefore, an import quota of 100 units per month would not affect the current level of imports.

Exhibit 19-6 -Refer to the Graph in the Exhibit.Suppose That the World