Question

2. Comparing tariffs, quotas, and subsidies Which of the following statements correctly identify why U.S. steel-using firms might lobby against the imposition of quotas on foreign steel sold in the United States? Check all that apply. Discriminating against low-cost foreign suppliers raises production costs for U.S. steel-using firms. Buy-national policies improve the quality of foreign steel. Discriminating against foreign suppliers reduces domestic producers' production costs. Buy-national policies allow domestic producers to use inferior production methods and pay higher resource prices.

Answer 1

Option A and D are correct.

"A" = discriminating against low cost foreign suppliers raises production cost for US steel using firms in the market and that will make the products costlier.

and "D" = This will increase cost of the local steel even though they are inferior in the quality.