CFA Practice Question

There are 341 practice questions for this study session.

CFA Practice Question

An import ban on tomatoes will ______

A. decrease the domestic production of tomatoes, increase the domestic price of tomatoes, and decrease the equilibrium quantity of tomatoes.
B. increase the domestic production of tomatoes, increase the domestic price of tomatoes, and decrease the equilibrium quantity of tomatoes.
C. increase the domestic production of tomatoes, decrease the domestic price of tomatoes, and decrease the equilibrium quantity of tomatoes.
Correct Answer: B

An import ban is designed to increase domestic production through an increase in domestic prices. This, however, results in a decrease in the equilibrium quantity of tomatoes.

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