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Answer questions 6 through 12 based on the following information: Consider a domestic market (industry) for product X represented by Domestic Demand: p=200-2 Domestic Supply:
Answer questions 6 through 12 based on the following information: Consider a domestic market (industry) for product X represented by Domestic Demand: p=200-2 Domestic Supply: p=2q where p and g represent price and quantity, respectively. Assume that the domestic market is 10. If a 60% tariff-equivalent quota policy is to be implemented, the import quota must be set at units A) 20 B) 25 C) 50 D) 65 11. If a 60% tariff-equivalent quota policy is to be implemented and the import licenses are auctioned, then there is the quota rent of that will accrue to the domestic government. A) S300 B) $500 C) $600 D) S750 12. If the import quota is instead set at 10 units, which differs from the 60% tariff equivalent quota then the quota-induced product price facing domestic consumers and producers will be per unit. A) S75 B) S80 C) $85 D) $90
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