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