AP Macroeconomics Question 317: Answer and Explanation

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Question: 317

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

Explanation:

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.