Microeconomics - Exam 3
- tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import
A major difference between tariffs and import quotas is that: - tariffs create deadweight losses, but import quotas do not - tariffs help domestic consumers, and import quotas help domestic producers - tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import - All of the above are correct
Q4-Q3 + Q2-Q1
Refer to Figure 9-15. A result of the tariff is that , relative to the free-trade situation, the quantity of saddles imported decreases by:
A+B
Refer to Figure 9-15. Consumer surplus with the tariff is:
Q3-Q2
Refer to Figure 9-15. With the tariff, the quantity of saddles imported is:
P1 and Q4
Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are:
E
Refer to Fire 9-15. The amount of government revenue created by the tariff is:
A+B+C+D+F
The figure illustrates the market for coffee in Guatemala. Refer to Figure 9-1. In the absence of trade, total surplus in Guatemala is represented by the area:
increased by the area B+D+G
The figure illustrates the market for coffee in Guatemala. Refer to Figure 9-1. When trade in coffee is allowed, producer surplus in Guatemala is:
False
True or False: A tariff on a product increases the domestic quantity demanded.
quota
a limit on the quantity of imports