The net loss in welfare from a quota is proportionately larger than for a tariff because:
a. it does not result in government revenue
b. the loss in consumer surplus is greater than the gain to producers and the government.
c. it prevents nations from fully realizing their competitive advantage.
d. it brings about higher prices and revenues to domestic producers.
a
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The FDIC fee system encourages depository institutions to
A) make riskier loans than they would otherwise. B) operate their institutions in too conservative a fashion. C) seek only a modest rate of return. D) reject loans that probably would have been profitable.
The opportunity cost of producing one more unit of a good or service is the
A) marginal cost. B) marginal benefit. C) efficient level of production. D) market outcome. E) price of the good or service.
Distinguish the short run from the long run. Generally, what causes costs of production to vary with output in the short run? What generally causes costs of production to vary in the long run?
What will be an ideal response?
Typically, a bank's largest asset is its
A) reserves. B) holdings of securities. C) deposits of its customers. D) loans.