Final answer:
All of the option the correct option is
B) increase; decrease; decrease; decrease
Step-by-step explanation:
An import quota restricts the quantity of goods that can be imported, causing an increase in producer surplus due to reduced competition and higher prices. However, it decreases consumer surplus as prices rise and consumer choices become limited. Government revenue also decreases as import quantities are restricted, leading to lower tariff revenue. Overall domestic national welfare decreases because the decrease in consumer surplus outweighs the increase in producer surplus, and there is a loss in government revenue.
When an import quota is imposed, it reduces the quantity of imported goods, causing an increase in the domestic price. This price increase leads to an expansion in producer surplus as domestic producers benefit from the higher price received for their goods. However, consumer surplus decreases as consumers face higher prices and a limited variety of goods. The government revenue from tariffs may decrease or remain unchanged since import quantities are restricted, resulting in a reduction in revenue. Consequently, the overall domestic national welfare decreases due to the larger decrease in consumer surplus compared to the increase in producer surplus, along with the decline in government revenue.