In 1980 the U.S imposed export quotas on grain sold to the Soviet Union in response to its armed invasion of Afghanistan if other nations do not increase grain exports to the soviets all the following would likely occur except?
Correct answer: C. Grains prices would rise in the united States
- A. Grain prices would rise in the Soviet union
- B. Consumer surplus would decrease for the soviets
- C. Grains prices would rise in the united States
- D. Export revenues would decrease for U.S producers
Explanation
Restricting U.S. grain exports reduces demand in the U.S. market, so U.S. grain prices would tend to fall rather than rise. Soviet prices would rise, Soviet consumer surplus would fall, and U.S. producers would generally lose export revenue.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
When one country provides most favored nation status (normal trade relations) for another, it agrees to ?
Countervailing duties levied by the U.S government are imposed to offset ?
All of the following are fundamental to the World Trade Organization except ?
Two countries can gain from foreign trade if ?
Commercial policy means_______________?
A tariff______________?