Post Utme Summit University 2021 Economics Question 34

Practice objective / multiple choice question 34 from the 2021 Post Utme Summit University Economics examination.

Post Utme Summit University 2021 Economics Objective / Multiple Choice

Question 34 POST_UTME_SUMMIT_UNIVERSITY • 2021 • ECONOMICS • objective

A government uses a quota to limit the quantity of a good that can be imported. If the quota is binding, what is the effect of an increase in the world price of the good on the domestic price?

Answer Options

Correct Answer A. The domestic price increases.

B. The domestic price decreases.

C. The domestic price remains the same.

D. The domestic price increases, but only if the quota is small.

Correct Answer

Correct Option:

The domestic price increases.

About This Question

This is Post Utme Summit University 2021 Economics Question 34. It is one of the objective questions from the 2021 Post Utme Summit University Economics examination.

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