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JAMB Economics 1981 Question 34

Question 34

International Trade

Prohibiting the sale of lace materials in Nigeria would probably lead to

  1. A.increased supply of lace materials in Nigeria
  2. B.production of better quality lace materials abroad
  3. C.lower price of lace materials in Nigeria
  4. D.higher price of lace materials in Nigeria
  5. E.increased income to all dealers of lace materials in Nigeria.
Show the answer and explanation

Answer: D (higher price of lace materials in Nigeria)

Explanation

A ban cuts the legal supply while people still want lace, so the price (often on the black market) goes up.