Which of the following statements is true about import quotas?
A. Import quotas benefit domestic producers by limiting import competition.
B. Import quotas always lower the prices for domestically produced goods.
C. Higher tariff rates are usually applied to imports within the quota than those over the quota.
D. Import quotas benefit consumers by decreasing the domestic price of an imported good.
E. Import quotas help foreign producers gain a competitive advantage.
Answer: A. Import quotas benefit domestic producers by limiting import competition
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The following information is available for Pohler Company:
Current assets $100,000 Current liabilities $75,000 Property, plant and Long-term liabilities 100,000 equipment 50,000 Stockholders' equity 125,000 Other assets 150,000 Total liabilities and Total assets $300,000 stockholders' equity $300,000 Invested capital is defined as total assets. Before-tax operating profit is $175,000. After-tax operating profit is $125,000. The after-tax cost of capital is 10%. What is economic profit? A) $95,000 B) $125,000 C) $145,000 D) $175,000