2. Why do economists believe that a a tariff is better than an import quota? (Actually...
2. Why do economists believe that a a tariff is better than an import quota? (Actually most economists do not like either!)
Homework Answers
Though both the tariffs and the quota increase the deadweight loss in the economy quotas affect the benefit even more than the tariffs.
With both the tariff and quota the price of the local and imported goods increase but with a tariff in the place the imported good generate the revenue for the government. Whereas in the case of quota the revenue is not with the revenue but the firm or the person allowed to import the goods. The license to import can be given on a first come and first serve basis or just auctioned away in any of the cases the revenue earned by the government is less and it might lead to a rent-seeking behavior increasing the corruption.
Tariff, on the other hand, will ensure a continuous revenue earning for the government on every imported product. In case of a quota, the inefficient firm will also increase the production beyond the quota limit which also harms the efficiency level in the economy.
Add Answer to:
2. Why do economists believe that a a tariff is better than an
import quota? (Actually...
The deadweight loss associated with an import tariff is smaller than a quota of the same...
The deadweight loss associated with an import tariff is smaller than a quota of the same impact because Cannot be determined from the information The government receives revenue from the tariff and not the quota. Price increases more with a tariff, O Quantity decreases more with a quota. The government receives revenue from the quota and not the tariff.
1. 2) The deadweight loss associated with an import tariff is smaller than a quota of...
1.
2) The deadweight loss associated with an import tariff is
smaller than a quota of the same impact because
________________.
a. The government receives revenue from the quota and not the
tariff.
b. Price increases more with a tariff.
c. Quantity decreases more with a quota.
d. The government receives revenue from the tariff and not the
quota.
e. Cannot be determined from the information
3) Will this firm shutdown?
Q = 5
Price: $30
MC = $10
AVC...
From the importing country’s point of view, a tariff is better than a quota because a. a tariff has a smaller effect on imports than does a quota. b. a tariff has a larger effect on imports than does a quota. c. the tariff generates tax
1. From the importing country’s point of view, a tariff is better than a quota because a. a tariff has a smaller effect on imports than does a quota.b. a tariff has a larger effect on imports than does a quota.c. the tariff generates tax revenue for the government.d. both reduce imports but only quotas increase price.
2. Why do economists believe that real GDP is a better measure of production over nominal...
2. Why do economists believe that real GDP is a better measure of production over nominal GDP?
Import tariff in the case of domestic monopoly a) leads to a higher welfare than the equivalent quota b) leads to the lower domestic prices than in the case of free trade c) leads to a lower welfare t...
Import tariff in the case of domestic monopoly a) leads to a higher welfare than the equivalent quota b) leads to the lower domestic prices than in the case of free trade c) leads to a lower welfare than the equivalent quota d) leads to the same level of welfare than the equivalent quota
Why do economists believe that inflation in the long run is entirely a monetary phenomenon? Explain...
Why do economists believe that inflation in the long run is entirely a monetary phenomenon? Explain fully.
Explain why the neoclassical economists believe that nothing much needs to be done about unemployment. Do...
Explain why the neoclassical economists believe that nothing much needs to be done about unemployment. Do you agree or disagree? Explain?
After going through all the theories in criminal justice, do you believe that the theories actually...
After going through all the theories in criminal justice, do you believe that the theories actually explain what the issues are and how to solve them or just make things more confusing? What theory do you like the best and why?
2. trade surplus 3. import quota 4. intra-industry trade 5. factor intensity 6. producer surplus II....
2. trade surplus 3. import quota 4. intra-industry trade 5. factor intensity 6. producer surplus II. TRUE OR FALSE? (20%) 1, A production possibilities frontier graphically represents the maximum output of a country when the supply of resources and technology are constant.() 2. Absolute advantage theory shows that two nations could both gain from trade by exporting products in which their labor productivity was higher than that of the other nation. () 3, Mercantilists believed that each nation should try...
each) 2. Answer the following questions as briefly and precisely as possible. (5 points What are a. Trade war bet...
each) 2. Answer the following questions as briefly and precisely as possible. (5 points What are a. Trade war between China and the U.S. has been escalating in recent weeks. the main reasons for the trade war to start? Discuss at least two reasons b. Which countries (and groups within a country) most likely support international la standards? Explain why c. Explain why some countries prefer import quota instead of import tariff? d. Contrary to what trade theory predicts, some...
The deadweight loss associated with an import tariff is smaller than a quota of the same impact because Cannot be determined from the information The government receives revenue from the tariff and not the quota. Price increases more with a tariff, O Quantity decreases more with a quota. The government receives revenue from the quota and not the tariff.
1.
2) The deadweight loss associated with an import tariff is
smaller than a quota of the same impact because
________________.
a. The government receives revenue from the quota and not the
tariff.
b. Price increases more with a tariff.
c. Quantity decreases more with a quota.
d. The government receives revenue from the tariff and not the
quota.
e. Cannot be determined from the information
3) Will this firm shutdown?
Q = 5
Price: $30
MC = $10
AVC...
2. trade surplus 3. import quota 4. intra-industry trade 5. factor intensity 6. producer surplus II. TRUE OR FALSE? (20%) 1, A production possibilities frontier graphically represents the maximum output of a country when the supply of resources and technology are constant.() 2. Absolute advantage theory shows that two nations could both gain from trade by exporting products in which their labor productivity was higher than that of the other nation. () 3, Mercantilists believed that each nation should try...
each) 2. Answer the following questions as briefly and precisely as possible. (5 points What are a. Trade war between China and the U.S. has been escalating in recent weeks. the main reasons for the trade war to start? Discuss at least two reasons b. Which countries (and groups within a country) most likely support international la standards? Explain why c. Explain why some countries prefer import quota instead of import tariff? d. Contrary to what trade theory predicts, some...
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