Two Economists Are Debating Whether to Remove a Tariff on Luxury

question 35

Multiple Choice

Two economists are debating whether to remove a tariff on luxury vehicles. They agree that consumers will benefit by $5 billion and that the harm done to domestic businesses and workers will be only $4 billion. One argues that these facts make it obvious that the tariff should be removed. The other disagrees. What would be a likely reason for the second economist to disagree?

• A) There is no good reason because the benefits outweigh the costs.
• B) He or she is using a different economic model to understand the world.
• C) He or she has a different interpretation of the empirical evidence.
• D) He or she has different value judgments about the weights that should be put on the benefits and costs.

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Definitions:

Certain Knowledge

Knowledge that is absolutely sure, indubitable, and beyond any possibility of doubt.

Descartes

René Descartes, a French philosopher, mathematician, and scientist, known for his statement "Cogito, ergo sum" (I think, therefore I am).

Astronomical Theory

A scientific theory or set of principles that aims to explain phenomena observed in astronomy, such as the motions of celestial bodies or the evolution of the universe.

Sunset

The time in the evening when the sun disappears below the horizon.