A country that must inhibit imports should give preference to
A. quotas over tariffs because quotas are less likely to distort trade patterns between nations.
B. tariffs over quotas because, unlike quotas, tariffs offer no special benefits to inefficient exporters.
C. export subsidies over quotas or tariffs because export subsidies can protect a nation’s domestic producers.
D. an embargo wherever possible because an embargo can serve as a political weapon in addition to being a “trade stopper.”
Answer: B
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A tax on primary resource use would
a. Increase recycling rates and raise the costs of some products b. Increase recycling rates and not affect product costs c. Decrease recycling rates and raise the cost of some products d. Decrease recycling rates and not affect product costs e. Decrease recycling rates but the effect on prices is unknown
If the cross elasticity of demand for DVD players and DVDs equals -2, then the products are
A) unrelated. B) complements. C) inferior goods. D) substitutes. E) normal goods.