Author Question: If the government restricts the selling of corn so that the quantity is less than the equilibrium ... (Read 28 times)

faduma · **on:** Jun 29, 2018

If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss. II. decreases total surplus.

A) Only I is correct.
B) Only II is correct.
C) Both I and II are correct.
D) Neither I nor II is correct.

Question 2

Currently, the United States has an import quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the import quota was removed? What would happen to U.S.

consumption and U.S. production of sugar?

zoeyesther · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

If the import quota is removed, the price of sugar in the United States would fall, U.S. consumption of sugar would increase, and U.S. production of sugar would decrease.