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33. (Figure 9-2: Shrimp Market) If the government imposes a quota limiting sales of shrimp to 500

pounds, the quota rent per pound is:
A) $0
B) $10.
C) $5.
D) $20

User Jivers
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2 Answers

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Final answer:

The actual quota rent per pound cannot be calculated with the information provided as it requires the domestic price after the quota is imposed, which is not given. Quota rent is the earning difference between the domestic and world price due to the restricted market by the quota.

Step-by-step explanation:

To determine the quota rent per pound when the government imposes a quota limiting sales of shrimp to 500 pounds, we need more information than what is provided. This calculation requires knowing the market price before and after the quota is imposed. Since the question does not provide the necessary data to determine the change in market price due to the quota, we are unable to accurately calculate the quota rent per pound. Quota rent is the difference between the domestic price of a good and the world price after a quota is applied. It represents the earnings that accrue to the license-holder or the government due to the market being restricted by the quota.

In a typical situation with a quota, the domestic price would likely rise above the world price since the quota restricts supply. The quota rent per pound would be the difference between the new higher domestic price and the original world price per pound. However, without specific numbers regarding the price after the quota imposition, we cannot definitively choose an answer from the given options.

User Roxerio
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User Suzann
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