The net loss in welfare from a quota is proportionately larger than for a tariff because:
a. it does not result in government revenue
b. the loss in consumer surplus is greater than the gain to producers and the government.
c. it prevents nations from fully realizing their competitive advantage.
d. it brings about higher prices and revenues to domestic producers.
a
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Looking at the supply-side effects on aggregate supply shows that a tax hike on labor income
A) decreases potential GDP. B) weakens the incentive to work. C) increases potential GDP because people work more to pay the higher taxes. D) Both answers A and B are correct. E) None of the above is correct.
If businesses feel more optimistic about the state of the economy, then this change is likely to:
A. Cause a movement up the investment demand curve B. Cause a movement down the investment demand curve C. Shift the investment demand curve to the left D. Shift the investment demand curve to the right