Question

If the government uses a quota to restrict imports of​ foreign-made shoes into the​ U.S.,

A. the price of shoes in the U.S. will​ decrease, and U.S. firms will produce more shoes.

B. the price of shoes in the U.S. will​ increase, and U.S. firms will produce more shoes.

C. the price of shoes in the U.S. will​ increase, and U.S. firms will produce fewer shoes.

D. the price of shoes in the U.S. will​ decrease, and U.S. firms will produce fewer shoes.

Answer 1

If we talk in the simple term then Quota is imposed by the government in any economy to limit the quantity import from a particular country

It generally helps to regulate the volume of trade by any government

If the quota is imposed on US-made shoes it means it is limiting the quantity of imported from the United States

This will lead to more supply as compared to demand in the foreign market and ultimately increasing the price of US shoes domestically

Also due to not coping with demand with the supply, there will be less or fewer production of US shoes

The correct answer here is option C