This preview shows page 1. Sign up to view the full content.
Unformatted text preview: rt)
that can enter a country. Future Price Quotas are restrictions on the number of
units of a foreign-produced good (import)
that can enter a country. For example, suppose Japanese producers are currently sending, and want to continue to send, 100,000
cars to the United States each year. Now suppose the U.S. government imposes a quota
on Japanese cars at 80,000 a year. This quota
means that no more than 80,000 Japanese
cars can be imported into the United States. Sellers who expect the price of a good to
be higher in the future may hold back the
good now and supply the good to the market in the future. Sellers who expect the price
of a good to be lower in the future may want
to supply the good now instead of later. S uppose you are an oil producer
and you want to know the
price of oil today and the
expected (future) price of oil. Where
would you look to find the current and future price of oil?
To find the current price, you might go to www.emcp.net/
oil. Here you will see the current (or sometimes called spot)
price for o...
View Full Document
- Winter '14