What are the main reasons for imposing a tariff?
What will be an ideal response?
There are two main reasons for imposing tariffs on imports. First the government receives tariff revenues from imports, which can be useful when revenues from income taxes and sales taxes are less effective ways of gaining government revenue. Second rent seeking by individuals in industries that would be hurt by foreign competition can influence the government to impose tariffs.
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Special interest groups
A) often gain from public policies that may not be in accord with the interests of the general public. B) never gain from public policies that are not in accord with the interests of the general public. C) always gain from public policies that are not in accord with the interests of the general public. D) never lobby for public policies that are not in accord with the interests of the general public. E) always lobby for public policies that are not in accord with the interests of the general public.
A famous opera star made $2 million per year. He said he would rather sell insurance if he couldn't make more than $200,000 per year. If he is telling the truth, how much is he being paid in economic rent?
A) $2.0 million B) $200,000 C) $1.8 million D) $2.2 million