If a Quota Is Set at the Same Quantity of Imports

question 90

Multiple Choice

If a quota is set at the same quantity of imports that results from a tariff,

• A)the deadweight loss from the tariff is greater than the deadweight loss from the import quota.
• B)the deadweight loss from the tariff equals the deadweight loss from the import quota.
• C)the deadweight loss from the import quota is greater than the deadweight loss from the tariff.
• D)the government tariff revenue is greater than the importers' profit from the import quota.
• E)the government tariff revenue is less than the importers' profit from the import quota.

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Definitions:

Inventory

The total amount of goods and materials held by a company that are ready for sale or in the process of being produced.

Perpetual Inventory System

The inventory system in which each purchase and sale of merchandise is recorded in an inventory account.

Control Over Inventory

The process of managing and regulating the supply, storage, and accessibility of inventory to ensure sufficient quantities without excessive surplus.

Periodic Inventory System

The inventory system in which the inventory records do not show the amount available for sale or sold during the period.