Scenario: Konesia Joins the World Konesia, a former totalitarian economy and pariah state, is taking steps toward a free market economy. The government wants to encourage trade but also wants to find a balance so that local businesses and industries are not harmed Which of the following is the most likely reason for Konesia's government to impose an import quota?
a. to maintain adequate supplies of a product in the home market
b. to maintain market shares and prices of domestic producers
c. to restrict the supply of a product to world markets
d. to maintain the exports of a product at target levels

b. to maintain market shares and prices of domestic producers.

Explanation:

In the Totalitarian economy, all the rights of producer are supressed and government take complete control of economy and does not take part in international trade. Other member in the society are not allowed to participate with complete right in the market. Intergrity and rights are not protected by the regulators or governments.

Now, as Konesia have joined the world and want to take steps toward free market, therefore they need to allow import and export, however, right of local traders need to protected by imposing import quota. Import quota will be helpful in maintaining the market share and the price of domestic producers, so that everyone can make profit and flourish, which was not possible during totalitarian economy.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

b is the correct answer