Suppose that the U.S. imposed an import quota on beef. Sales of U.S. beef producers would
A)rise and exports of other industries would increase.
B)rise and exports of other industries would decline.
C)not change, exports of other industries would increase.
D)not change, exports of other industries would decline.

Question

Quizplus · Accepted Answer

With an import quota on beef, the domestic supply of beef will increase and become relatively cheaper compared to the imported beef. This will lead to a rise in sales of U.S. beef producers. However, because of the restriction on imports, exports of other industries would decline as foreign countries may retaliate with their own import restrictions, which in turn leads to decreased demand for U.S. exports.

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