A limit on the amount of strawberries that can be imported into the United States is an example of
A) the rationing function of prices protecting domestic strawberry farmers.
B) a price floor set by the government.
C) a price ceiling set by government.
D) an import quota.

Question

Quizplus · Accepted Answer

An import quota is a limit on the amount of a good that can be imported into a country. In this case, the United States is limiting the amount of strawberries that can be imported, which is an example of an import quota. This is done to protect domestic strawberry farmers from foreign competition. Choice A is incorrect because the rationing function of prices refers to how prices allocate scarce resources, not how imports are limited. Choice B is incorrect because a price floor would set a minimum price for strawberries, not a limit on the amount that can be imported. Choice C is incorrect because a price ceiling would set a maximum price for strawberries, not a limit on the amount that can be imported.

A Limit on the Amount of Strawberries That Can Be