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.

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