An import quota
a. is preferable to a tariff since an import quota does not create a deadweight loss.
b. is a tax on imported goods.
c. reduces the welfare of domestic consumers.
d. reduces the welfare of domestic producers.
c
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Referring to a production possibilities curve and the goods being compared, depict the economic event. Suppose the United States was at full employment in 2003 just before invading Iraq. Although the war was won quickly, winning the peace took a decade (guns vs. butter).
A. A movement from a point on or near the curve to a point inside the curve B. A shift in the entire curve to the right (outward) C. A shift in the entire curve to the left (inward) D. A movement along the curve
The long-run aggregate supply line is:
A. downward sloping. B. upward sloping. C. vertical at the economy's actual output. D. vertical at the economy's potential output.
Suppose a Japanese bank offers a 4 percent interest rate and U.S. banks offer a 2 percent interest rate. People must expect the yen to
A) depreciate by 2 percent. B) appreciate by 2 percent. C) depreciate by 6 percent. D) appreciate by 6 percent.
Over the last 50 years, the rich have:
A. become relatively poorer, and the poor have become relatively poorer, too. B. become richer, and the poor have become poorer. C. become richer, and the poor have become richer, too. D. become relatively poorer, and the poor have become relatively richer.