Suppose that Canada imposed an import quota on beef. Which of the following identifies the most likely results?
A)Sales of Canadian beef would rise; exports of other industries would increase.
B)Sales of Canadian beef would rise; exports of other industries would decline.
C)Sales of Canadian beef would not change; exports of other industries would increase.
D)Sales of Canadian beef would not change; exports of other industries would decline.

Question

Quizplus · Accepted Answer

By imposing an import quota on beef, Canada would restrict the amount of foreign beef entering the Canadian market. This would increase the demand for Canadian beef, causing sales to rise. However, this would also reduce the demand for foreign beef, leading to a decline in exports for other industries. Therefore, the most likely result is that sales of Canadian beef would rise, but exports of other industries would decline.

Suppose That Canada Imposed an Import Quota on Beef