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1. Acirema is a small country with respect to the world market for mineral water, and...

1. Acirema is a small country with respect to the world market for mineral water, and imports mineral water. The government decides to impose an import quota on mineral water imports.

a) Under what conditions would the net welfare effect of the import quota be positive?
b) in trade, what does it mean to be a small country?
c) if demand for mineral water is expected to increase, would consumers in Acirema prefer a tariff or an equivalent quota? Why?

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