Statement–Courses of Action (trade policy and market behaviour): Imported fruits have become widely available in the domestic market, and demand for indigenous fruits has declined; which course(s) of action logically follow—imposing high import duties on these fruits even if domestic fruits are not of good quality, or instructing fruit vendors to stop selling imported fruits so that demand for indigenous produce rises?

Difficulty: Medium

Correct Answer: Neither I nor II follows

Explanation:


Given data

  • Imported fruits are more available; demand for indigenous fruits has dropped.
  • Courses proposed: (I) Impose high import duty even if domestic quality is inferior. (II) Fruit vendors should stop selling imported fruits.


Concept/Approach (consumer welfare and feasibility)
Valid courses should be fair, practical, and address the issue without unjustified harm to consumers or unrealistic controls on private vendors.


Step 1: Evaluate Course I
Raising duties to favour lower-quality domestic fruits harms consumers and rewards inefficiency; the statement provides no justification for protectionism despite inferior quality.


Step 2: Evaluate Course II
Ordering vendors to stop selling imported fruits is impractical and anti-competitive without any legal basis indicated in the statement.


Verification/Alternative
A logical response (not among options) would be improving domestic quality and marketing rather than coercive restrictions.


Common pitfalls
Assuming demand can be forced through protectionist or coercive measures irrespective of quality.


Final Answer
Neither I nor II follows.

More Questions from Course of Action

Discussion & Comments

No comments yet. Be the first to comment!
Join Discussion