2006 Multiple Choice q7 (1 Viewer)

david1337king

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The answer from BOS said it was D.

I got B.

Is this a mistake? Coz if quota increases, then import supply would decrease = less competition for domestic producers.
 

MyLoveIsPure

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david1337king said:
The answer from BOS said it was D.

I got B.

Is this a mistake? Coz if quota increases, then import supply would decrease = less competition for domestic producers.
i got B too. A shift to the left for supply usually means a decrease in quantity and a increase in price.
 

Mr-X

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D would be the correct answer.
The supply of cars is down, which means that the quota of cars was decreased, which means less cars are getting imported and local car producers face less competition which pushes up the price for consumers.
 

david1337king

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Mr-X said:
D would be the correct answer.
The supply of cars is down, which means that the quota of cars was decreased, which means less cars are getting imported and local car producers face less competition which pushes up the price for consumers.
But if the imports supply of cars have decreased, doesn't this mean that the quotas have increased.

eg. If Au gov't increases quota, then less supply of imported goods can be imported into Au.
 

MyLoveIsPure

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Mr-X said:
D would be the correct answer.
The supply of cars is down, which means that the quota of cars was decreased, which means less cars are getting imported and local car producers face less competition which pushes up the price for consumers.
your saying foreign car producers are obliged to import the maximum amount to cars possible into Australia, based on the quota limit? If quota decreases, foreign producers should import more into australia at a cheaper price.
 

Mr-X

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david1337king said:
But if the imports supply of cars have decreased, doesn't this mean that the quotas have increased.

eg. If Au gov't increases quota, then less supply of imported goods can be imported into Au.
"Quotas refer to restrictions of the amounts or values of various kinds of goods that may be imported"

If the quota was increased then they'ld be able to import more cars, but the graph shows the supply has falled, which means they've reduced the quota because the supply of cars has supply of cars have been decreased.
 

Mr-X

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MyLoveIsPure said:
your saying foreign car producers are obliged to import the maximum amount to cars possible into Australia, based on the quota limit? If quota decreases, foreign producers should import more into australia at a cheaper price.
Foreign car producers will import however much they will need to meet demand (or they may dump it onto the domestic market).

However, to protect local car producers, the government has placed a quota on the amount of cars which can be imported. Say the quota is 500 cars. In this case, the quota would have decreased to say 300 cars. As you can see, less cars can be imported into the domestic economy, reducing supply, which ultimately increases prices for the consumer and gives the local car producer an advantage as they face less competition.
 

david1337king

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Mr-X said:
"Quotas refer to restrictions of the amounts or values of various kinds of goods that may be imported"

If the quota was increased then they'ld be able to import more cars, but the graph shows the supply has falled, which means they've reduced the quota because the supply of cars has supply of cars have been decreased.
I get you.
But my definition of quota which was stated in the Cambridge Textbook is the limit on the amount of G&S imported into Au.

If I answer the question with your definintion, I would also get D. Thats probably the BOS definition as well. Thanks mate
 

dcalla

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david1337king said:
But if the imports supply of cars have decreased, doesn't this mean that the quotas have increased.

eg. If Au gov't increases quota, then less supply of imported goods can be imported into Au.
quota is a kinda volume restriction.

if you INCREASE a quota, you allow MORE volume to be imported.
 

david1337king

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dcalla said:
quota is a kinda volume restriction.

if you INCREASE a quota, you allow MORE volume to be imported.
I thought it was the opposite. If you Increase a quota, you allow Less volume to be imported. Thats probably why I got it wrong. Thanks
 

Jerruy

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answer is d stupid people The quota has decreased and local car producers face less competition.
 

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