Will a home monopolist prefer a quota or a tariff to protect its output?
a. The home monopolist will prefer a tariff, because a tariff allows it to earn higher profits than a quota.
b. The home monopolist will prefer a quota, because a quota may allow it to earn higher profits than a tariff.
c. It is immaterial to the home monopolist because it will earn the same higher profits with each form of protection.
d. The home monopolist will prefer neither, because it earns higher profits in a free-trade situation.
Ans: b. The home monopolist will prefer a quota, because a quota may allow it to earn higher profits than a tariff.
You might also like to view...
To be effective in raising people's wages, a minimum wage must be set
A) above the equilibrium wage rate. B) below the equilibrium wage rate. C) equal to the equilibrium wage rate. D) below $7. E) either above or below the equilibrium wage depending on whether the supply curve of labor shifts rightward or leftward in response to the minimum wage.
Wage differences among workers of different races and gender could be due to all of the following except
A) differences in preferences for jobs. B) labor unions. C) differences in work experience. D) differences in education.