A tariff is better than a quota because
a. it does not distort trade as much.
b. quotas are inflexible.
c. tariffs produce tax revenue.
d. quotas hurt domestic producers; tariffs hurt foreign producers.
c
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One thousand adults live in Milltown. Every day, they all leave work at 4:30 p.m., arrive home at exactly 5:00 p.m., and go to bed at 9:00 p.m. Three fundraisers, Alpha, Beta, and Charlie, have targeted Milltown's population. To get a donation, they must call Milltown's residents after they get home from work but before they go to bed. Because the charities raising the funds are identical, the first to call a willing donor will get the donation. Beta's manager has decided that the best time to call is 7:00 p.m. because it is exactly halfway between 5:00 p.m. and bedtime. Which of the following is true?
A. Alpha and Charlie will also make calls at 7:00 p.m. B. Beta is certain to generate the most donations. C. Alpha and Charlie will divide up the rest of the market, with one choosing to call at 6:00 p.m. and the other at 8:00 p.m. D. Beta's manager did not choose wisely.
A central bank like the Federal Reserve in the United States can help banks survive a bank run by
A) raising the discount rate. B) acting as a lender of last resort. C) printing money. D) increasing the required reserve ratio.
The opposite of the bandwagon effect is:
A. a network externality, positive or negative. B. a positive network externality. C. the substitution effect. D. the snob effect.
A market equilibrium will generate the largest possible surplus when:
A. there are no external benefits and external costs. B. there is perfect competition. C. perfect information is available. D. All of these.