Asked by
Leslie Molinar
on Nov 17, 2024Verified
Imposing a quota on the import of a good is preferable to a tariff because a tariff creates a deadweight loss while a quota does not.
Deadweight Loss
A loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is not achievable.
Quota
A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specific time frame.
Tariff
Tariff is a tax imposed on imported goods and services to regulate trade and to increase government revenue.
- Critique the effects of tariffs and quotas on international trading activities and public sector revenue.
Verified Answer
ER
Learning Objectives
- Critique the effects of tariffs and quotas on international trading activities and public sector revenue.