The supply of apples in Canada is made up of Canadian grown apples and imported apples. Initially, Canada engages in free trade in the apple market. Price (dollars per kilogram) 30.00- Then Canada puts an import quota on apples. S 25.00- S+quota The graph shows the Canadian market for apples when the Canadian government puts an import quota on apples. 20.00- Explain who gains and who loses from an import quota and why the losses exceed the gains. 15.00- DCE World 10.00- price O C. The government loses from an import quota and producers gain from an import quota but producers gain less than the government loses. A 5.00- O D. Consumers and producers lose from an import quota and the government gains from an import quota but producers and consumers lose more than the government gains. 0.00 600 Quantity (thousands of kilograms per year) 200 400 800 1000 1200 The Canadian consumer surplus that is redistributed to Canadian producers is and the import quota creates a deadweight loss equal to O A. area B; area D + E O B. area B; area C + E O C. area B + C+D+ E; zero O D. area B+ C+F; area D
The supply of apples in Canada is made up of Canadian grown apples and imported apples. Initially, Canada engages in free trade in the apple market. Price (dollars per kilogram) 30.00- Then Canada puts an import quota on apples. S 25.00- S+quota The graph shows the Canadian market for apples when the Canadian government puts an import quota on apples. 20.00- Explain who gains and who loses from an import quota and why the losses exceed the gains. 15.00- DCE World 10.00- price O C. The government loses from an import quota and producers gain from an import quota but producers gain less than the government loses. A 5.00- O D. Consumers and producers lose from an import quota and the government gains from an import quota but producers and consumers lose more than the government gains. 0.00 600 Quantity (thousands of kilograms per year) 200 400 800 1000 1200 The Canadian consumer surplus that is redistributed to Canadian producers is and the import quota creates a deadweight loss equal to O A. area B; area D + E O B. area B; area C + E O C. area B + C+D+ E; zero O D. area B+ C+F; area D
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 8PA
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Question
A3
Transcribed Image Text:The supply of apples in Canada is made up of Canadian grown apples and
imported apples. Initially, Canada engages in free trade in the apple market.
Price (dollars per kilogram)
30.00-
Then Canada puts an import quota on apples.
25.00-
The graph shows the Canadian market for apples when the Canadian
S+ quota
government puts an import quota on apples.
20.00-
Explain who gains and who loses from an import quota and why the losses
exceed the gains.
15.00-
B
D CFE
World
10.00-
price
OC. The government loses from an import quota and producers gain from an
import quota but producers gain less than the government loses.
A
5.00-
D
O D. Consumers and producers lose from an import quota and the
government gains from an import quota but producers and consumers
lose more than the government gains.
0.00-
200
Quantity (thousands of kilograms per year)
400
600
800
1000
1200
The Canadian consumer surplus that
redistributed to Canadian producers is
and the import quota creates a deadweight loss equal to
A. area B; area D +E
O B. area B; area C +E
O C. area B+C +D+ E; zero
O D. area B + C + F; area D
O Time Remaining: 00:44:30
Next
O 0 O O
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