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The following graph shows the domestic demand for and supply of barley in Canada. The horizontal green line shows the world price of $1 for a bushel of barley. Canada imports barley primarily from the United States. Assume that the amount demanded by any one country does not affect the world price of barley. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. (Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey fields will change accordingly.) Graph Input Tool (? I Price (Dollars per bushel) 1 Supply Domestic Demand (Milions of bushels) Domestic Supply (Millions of bushéls) 45 Imports (Milions of bushels) 40 Demand 5 10 15 QUANTITY (MIlons of bushels of barley) 20 25 30 35 40 45 50 The Canadian government decides to impose trade restrictions on barley imports by setting a quota of 10 million bushels of barley. With the quota, the price of barley In Canada will be S per bushel. The Canadian government explains that it is necessary to Impose trade restrictions on barley to protect workers in the domestic barley Industry. Assume that the Canadian government would like to generate government revenue through its protectionist policies. Which of the following would provide the Canadian government with revenue? Check all that apply. PRICE (Dollars)

The following graph shows the domestic demand for and supply of barley in Canada. The horizontal green line shows the world price of $1 for a bushel of barley. Canada imports barley primarily from the United States. Assume that the amount demanded by any one country does not affect the world price of barley. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. (Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey fields will change accordingly.) Graph Input Tool (? I Price (Dollars per bushel) 1 Supply Domestic Demand (Milions of bushels) Domestic Supply (Millions of bushéls) 45 Imports (Milions of bushels) 40 Demand 5 10 15 QUANTITY (MIlons of bushels of barley) 20 25 30 35 40 45 50 The Canadian government decides to impose trade restrictions on barley imports by setting a quota of 10 million bushels of barley. With the quota, the price of barley In Canada will be S per bushel. The Canadian government explains that it is necessary to Impose trade restrictions on barley to protect workers in the domestic barley Industry. Assume that the Canadian government would like to generate government revenue through its protectionist policies. Which of the following would provide the Canadian government with revenue? Check all that apply. PRICE (Dollars)

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
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6. Effects of a quota on domestic prices The following graph shows the domestic demand for and supply of barley in Canada. The horizontal green line shows the world price of $1 for a bushel of barley. Canada imports barley primarily from the United States. Assume that the amount demanded by any one country does not affect the world price of barley. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. (Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey fields will change accordingly.) Graph Input Tool 10 O Price (Dollars per bushel) Supply Domestic Demand (Millions of bushels) Domestic Supply (MIlions of bushels) 45 Imports (Millions of bushels) 40 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITY (MIlons of bushels of barley) The Canadian government decides to impose trade restrictions on barley imports by setting a quota of 10 million bushels of barley. With the quota, the price of barley In Canada will be S per bushel. The Canadian government explains that it is necessary to Impose trade restrictions on barley to protect workers in the domestic barley Industry. Assume that the Canadian government would like to generate government revenue through its protectionist policies. Which of the following would provide the Canadian government with revenue? Check all that apply. O A tariff on U.S. barley O A quota on barley in which import licenses are auctioned off to U.S. barley producers O A quota on barley in which import licenses are given to the U.S. government for free distribution to U.S. barley producers O A quota on barley in which the quotas are distributed vla lottery PRICE (Dollars)
Transcribed Image Text:6. Effects of a quota on domestic prices The following graph shows the domestic demand for and supply of barley in Canada. The horizontal green line shows the world price of $1 for a bushel of barley. Canada imports barley primarily from the United States. Assume that the amount demanded by any one country does not affect the world price of barley. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. (Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey fields will change accordingly.) Graph Input Tool 10 O Price (Dollars per bushel) Supply Domestic Demand (Millions of bushels) Domestic Supply (MIlions of bushels) 45 Imports (Millions of bushels) 40 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITY (MIlons of bushels of barley) The Canadian government decides to impose trade restrictions on barley imports by setting a quota of 10 million bushels of barley. With the quota, the price of barley In Canada will be S per bushel. The Canadian government explains that it is necessary to Impose trade restrictions on barley to protect workers in the domestic barley Industry. Assume that the Canadian government would like to generate government revenue through its protectionist policies. Which of the following would provide the Canadian government with revenue? Check all that apply. O A tariff on U.S. barley O A quota on barley in which import licenses are auctioned off to U.S. barley producers O A quota on barley in which import licenses are given to the U.S. government for free distribution to U.S. barley producers O A quota on barley in which the quotas are distributed vla lottery PRICE (Dollars)
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