A ban on imports, a tariff, or a quota raises the price to domestic consumers. This means that consumers will buy less of the product at a higher price. The loss associated with this is called
A) production associated loss.
B) productive consumption loss.
C) consumption distortion loss.
D) consumer misperception loss.
C
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Which of the following is NOT a reason for the weak recovery following the 2007-2009 recession?
A) Recessions started by financial crises are almost always severe. B) The decline in the automobile industry appeared to be structural. C) The collapse of the housing market was long lived. D) The recession was caused by a decline in short-run aggregate supply.
The silly clothes worn by a circus clown are an example of
a. market inefficiency b. capital goods c. labor, if it is used by labor exclusively d. human capital e. entrepreneurship, if the clown becomes more creative wearing the clothes
Describe who benefits and who loses from tariffs and from quotas. What is the major difference between the effects of a quota and the effects of a tariff?
Ordinary least squares estimation is subject to heterogeneity bias if _____.
A. the regression model exhibits heteroskedasticty B. the unobserved effect is correlated with the observed explanatory variables C. the regression model includes a lagged dependent variable D. the explanatory variables do not change over time