Figure 5.5. Mexico's Television Market
-Consider Figure 5.5.Assuming that the revenue effect of the export quota accrues to Japanese firms, the overall welfare loss to Mexico equals $2,100 as a result of the quota.

Question

Figure 5.5. Mexico's Television Market 
-Consider Figure 5.5.Assuming that the revenue effect of the export quota accrues to Japanese firms, the overall welfare loss to Mexico equals $2,100 as a result of the quota.

Quizplus · Accepted Answer

The statement assumes a specific scenario where a quota leads to a welfare loss for Mexico, which can be true if the quota reduces Mexico's export opportunities or increases costs, leading to a net welfare loss quantified as $2,100. This is a plausible outcome in economic models analyzing the impact of quotas on trade and welfare.