Which of the Following Statements About Import Quotas Is True

question 7

Multiple Choice

Which of the following statements about import quotas is true?

• A) Voluntary quotas established by the exporting country reduce the importing country's deadweight loss from the trade restriction.
• B) An import quota reduces the price to the domestic consumers.
• C) An import quota increases the welfare of domestic producers.
• D) Import quotas are preferred to tariffs because they raise more revenue for the imposing government.

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Definitions:

Service

The action or process of serving or providing assistance to others, often in the context of customers or clients.

Estoppel

A rule whereby a person may not deny the truth of a statement of fact made by him or her when another person has relied and acted upon the statement.

Consideration

The benefit or value that must be exchanged between parties to form a valid contract.

Common Law

A legal system based on precedent and court decisions rather than written laws or statutes.