Answer to Question #77194 in Microeconomics for David Justice

Question

Determine whether the following are true or false. Explain you answer.

1. A ban on fishing in some fishing communities in a country will lower the price of fish

2. Protecting local textile manufacturers from Chinese clothing imports will lower the clothing price in that locality.

3. The rapid increase in price for toilet rolls in a country will lower the demand for toilet rolls.

4. The war against drugs, with increased interdiction of imported cocaine, will lower the price of domestically produced marijuana.

Answer 1

1. A ban on fishing in some fishing communities in a country will lower the price of fish.
It is false, because supply will decrease and price will increase.
2. Protecting local textile manufacturers from Chinese clothing imports will lower the clothing price in that locality.
It is false, because supply will decrease and price will increase.
3. The rapid increase in price for toilet rolls in a country will lower the demand for toilet rolls.
It is false, because demand will not change, but quantity demanded will decrease.
4. The war against drugs, with increased interdiction of imported cocaine, will lower the price of domestically produced marijuana.
It is false, because supply will decrease and price will increase.