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Tariffs vs. Quotas: Assessing Economic Impact and Trade Policies

Chapter 20, Problem 6

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QUESTION:

Why is a quota more detrimental to an economy than a tariff that results in the same level of imports as the quota? What is the net outcome of either tariffs or quotas for the world economy?

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QUESTION:

Why is a quota more detrimental to an economy than a tariff that results in the same level of imports as the quota? What is the net outcome of either tariffs or quotas for the world economy?

ANSWER:

Step 1 of 3

A quota is generally considered more detrimental to an economy than a tariff that results in the same level of imports for several reasons:

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