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True or False: If the amount of quota imposed by a government and the resultant price...

True or False:

  1. If the amount of quota imposed by a government and the resultant price change are equivalent to the amount of imports and the price change that a specific tariff would have, then the revenue the government collects from the imposition of the quota is the same as the revenue the government would collect if it imposed a specific tariff instead.
  2. Quotas are the commonly used form of trade barriers in the world.
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Answer #1

1. If the amount of quota imposed by a government and the resultant price change are equivalent to the amount of imports and the price change that a specific tariff would have, then the revenue the government collects from the imposition of the quota is the same as the revenue the government would collect if it imposed a specific tariff instead.

TRUE.

If the resultant price change for both is same, then the revenue collected would be more or less same.

2. Quotas are the commonly used form of trade barriers in the world - TRUE

Most countries use quotas as trade barriers.

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