The Canadian government decides to impose trade restrictions on barley imports by setting a quota of 20 million bushels of barley. With the quota, the price of barley in Canada will be $_____ per bushel.The Canadian government explains that it is necessary to impose trade restrictions on barley to protect workers in the domestic barley industry. Assume that the Canadian government would like to generate government revenue through its protectionist policies.Which of the following would provide the Canadian government with revenue? *Check all that apply.*- [ ] A quota on barley in which the import licenses are distributed via lottery- [ ] A tariff on U.S. barley- [ ] A quota on barley in which import licenses are auctioned off to U.S. barley producers- [ ] A quota on barley in which import licenses are given to the U.S. government for free distribution to U.S. barley producers # Effects of a Quota on Domestic PricesThe following graph illustrates the domestic demand and supply of barley in Canada. The horizontal green line highlights the world price of $2 per bushel of barley. Canada primarily imports barley from the United States. It is assumed that the demand from any single country does not influence the world price of barley.**Instructions:**Use the graph to assist in answering the questions below. Changes made to the graph will not be graded.**Note:** Once a value is entered in a white field, the graph and any related amounts in the grey fields will update accordingly.## Graph Explanation### Graph Input Tool- **Price (Dollars per bushel):** $2$- **Domestic Demand (Millions of bushels):** $40$- **Domestic Supply (Millions of bushels):** $10$- **Imports (Millions of bushels):** $30$### Graph Details- **X-axis (Quantity):** Represents millions of bushels of barley.- **Y-axis (Price):** Represents the price in dollars per bushel.- **Supply Curve (Orange Line):** Shows the domestic supply of barley.- **Demand Curve (Blue Line):** Shows the domestic demand for barley.- **World Price Line (Green Line):** Fixed at $2, indicating the world market price. The intersection of the supply and demand curves indicates market equilibrium, while the horizontal world price line represents the point where imports fill the gap between domestic supply and demand.

Tariff refers to the situation where the government imposes tax on the imported goods in order to…

The following graph shows the domestic demand for and supply of barley in Canada. The horizontal green line shows the world price of $2 for a bushel of barley. Canada imports barley primarily from the United States. Assume that the amount demanded by any one country does not affect the world price of barley. Use the graph to help you answer the following questions. You will not be graded on any changes you make to this graph. (Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey fields will change accordingly.) PRICE (Dollars) 10 9 8 7 2 quota on domestic pr 1 0 + Supply Demand 05 10 15 15 20 25 30 30 35 40 45 50 QUANTITY (Millions of bushels of barley) Graph Input Tool Price (Dollars per bushel) Domestic Demand (Millions of bushels) Imports (Millions of bushels) 2 40 30 Domestic Supply (Millions of bushels) (? 10

The following graph shows the domestic demand for and supply of barley in Canada. The horizontal green line shows the world price of $2 for a bushel of barley. Canada imports barley primarily from the United States. Assume that the amount demanded by any one country does not affect the world price of barley. Use the graph to help you answer the following questions. You will not be graded on any changes you make to this graph. (Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey fields will change accordingly.) PRICE (Dollars) 10 9 8 7 2 quota on domestic pr 1 0 + Supply Demand 05 10 15 15 20 25 30 30 35 40 45 50 QUANTITY (Millions of bushels of barley) Graph Input Tool Price (Dollars per bushel) Domestic Demand (Millions of bushels) Imports (Millions of bushels) 2 40 30 Domestic Supply (Millions of bushels) (? 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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