What are the net costs of tariffs and quotas on consumption and income distribution?
What will be an ideal response?
The cost to society is that protectionism raises product prices by raising the imported price of the product. Higher-priced imports cause some consumers to switch to higher priced domestic products, thus increasing the price of domestic products. Any benefits for government, businesses, and workers from tariffs and quotas are outweighed by the costs to American society. Efforts to obtain trade protection are also a form of rent seeking that causes a allocations of resources for society.
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Explain how it is possible for marginal utility to fall while total utility is still on the rise?
What will be an ideal response?
Prohibiting price increases in situations of true scarcity could best be described as
a. interfering with the "law" of supply and demand. b. thwarting the "law" of increasing returns to scale. c. violating the "law" of increasing cost. d. interfering with the "law" of diminishing marginal utility.
Assume, for England, that the domestic price of wine without international trade is lower than the world price of wine. This suggests that, in the production of wine,
a. England has a comparative advantage over other countries and England will export wine. b. England has a comparative advantage over other countries and England will import wine. c. other countries have a comparative advantage over England and England will export wine. d. other countries have a comparative advantage over England and England will import wine.
Identify the four broad categories that make up the asset side of the balance sheet for banks and which category is usually the largest.
What will be an ideal response?