Assume the United States is considering either a tariff or a quota to protect motorcycles
For each of the following groups, list whether they should prefer either the tariff or the quota, or be indifferent between the two: importer of motorcycles, taxpayers, foreign producer of motorcycles.
The importer of motorcycles will prefer the quota because it generates extra profit for him since the importer can buy at the world price and sell it at the artificially high domestic price. The taxpayers prefer the tariff, because at least it brings in revenue to the U.S. Treasury which could be used to reduce taxes elsewhere. Foreign producers of motorcycles will be indifferent between the two because the effect on them will be the same under both a tariff and quota.
You might also like to view...
The relationship between the quantity of inputs and the quantity of outputs is called:
A. an input-output function. B. a production function. C. a cost function. D. a resource function.
The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls
a. True b. False Indicate whether the statement is true or false
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
A ________ creates a situation in which the price received by sellers ________ the price paid by buyers.
Fill in the blank(s) with the appropriate word(s).