Asked by Taylyn Vences on May 08, 2024
Verified
A country's government would like to raise the price of one its most important agricultural crops, coffee beans. Which of the following government programs will result in higher prices for coffee beans?
A) An import quota on coffee beans
B) An acreage limitation program which provides coffee bean farmers financial incentives to leave some of their acreage idle
C) An import tariff on coffee beans
D) all of the above
Import Quota
Limit on the quantity of a good that can be imported.
Acreage Limitation
Policies or regulations that restrict the amount of land that can be used or owned, often for agricultural purposes.
Import Tariff
A tax imposed by a government on goods imported from other countries, often to protect domestic industries.
- Analyze the impact of government interventions, such as tariffs, quotas, and minimum wages, on market equilibrium, consumer surplus, and producer surplus.
Verified Answer
FU
Frank UriasMay 10, 2024
Final Answer :
D
Explanation :
All of the options listed would contribute to raising the price of coffee beans. An import quota (A) limits the quantity of coffee beans that can be imported, reducing supply. An acreage limitation program (B) reduces the amount of coffee beans produced domestically by incentivizing farmers to leave some of their land idle, also reducing supply. An import tariff (C) increases the cost of imported coffee beans, making them more expensive and potentially reducing their supply in the domestic market. All these measures reduce the overall supply of coffee beans in the market, which, according to the law of supply and demand, would lead to higher prices.
Learning Objectives
- Analyze the impact of government interventions, such as tariffs, quotas, and minimum wages, on market equilibrium, consumer surplus, and producer surplus.
Related questions
Domestic Consumers Gain and Domestic Producers Lose When the Government ...
The Basic Difference in the Economic Effects of a Tariff ...
Assume That a Tariff Is Imposed on an Imported Product ...
Suppose the Government Does Not Provide an Incentive Payment to ...
Under a Production Quota Policy, the Government Can Maintain a ...