Final answer:
The Clean Diamond Trade Act, requiring additional testing for diamond purity, is likely to decrease the supply of diamonds in the USA as sellers face additional costs and certification steps, leading to (b) supply would decrease as the correct option.
Step-by-step explanation:
The question asks about the likely effects of the Clean Diamond Trade Act on the supply of diamonds in the USA. This Act would require additional testing to establish the purity of diamonds, ensuring that they are not conflict diamonds. When such regulations are put in place, the supply of diamonds could decrease due to the additional steps and costs involved in the certification process. This is because some diamonds might fail the purity test or sellers may be reluctant to bear the cost and time of extra testing. So, the correct option in the final answer would be (b) supply would decrease.
Similarly, we can draw a parallel from a scenario involving emeralds. If a website selling emeralds enforces stringent quality checks, one would expect that the demand for high-quality emeralds could likely increase due to improved buyer confidence in the product's authenticity. Also, the quantity of high-quality emeralds sold on the website would be affected positively, as buyers are more likely to purchase when they are assured of the quality through readily available examination reports.
By analogy, introducing additional testing for diamonds' purity is likely to lead to a reduced supply of diamonds initially but potentially could lead to increased demand for certified, pure diamonds once the market adjusts to the new requirements. Furthermore, the influence of major companies like DeBeers shows that changes in diamond certification practices can have a significant impact, given their substantial control over the rough diamond market and distribution channels.