Question

1.How do voluntary export restraints differ from other protective barriers?

Voluntary export restraints tend to be less expensive than tariffs.

Voluntary export quotas tend to have significantly larger economic effects than equivalent import quotas.

The revenue effect of an export quota is captured by the foreign exporting company or its government.

The revenue effect of an export quota is captured by the domestic (importing) company or its government.

2. A government subsidy granted to import–competing producers leads to a smaller deadweight loss than a tariff or quota because a subsidy does not result in a _______ effect. protective or cosumption?

3. In 1980, the U.S. auto industry proposed that import quotas be imposed on foreign produced cars sold in the United States.

Which of the following are the consequences of this policy? Check all that apply.

Deadweight losses in production and consumption

Lower prices on autos sold in the United States

Increase in sales of domestically produced autos

Decrease in sales of domestically produced autos

Answer 1