AP Macroeconomics Question 317: Answer and Explanation
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6. When the United States places an import quota on imported sugar, we expect which of the following effects?
- A. Consumers seek substitutes for sugar and products that use sugar.
- B. Consumers consume more sugar and products that use sugar.
- C. The supply of sugar increases.
- D. Net exports in the United States fall.
- E. The government collects revenue on every ton of imported sugar.
Correct Answer: A
A —A quota increases the price of sugar so consumers seek substitutes. We may see rising demand for sugar-free gum or falling demand for rich desserts.