A Difference Between a Quota and a Tariff Is That

question 98

Multiple Choice

A difference between a quota and a tariff is that

• A) the government collects revenue from a tariff but does not collect revenue from a quota.
• B) a tariff generates a higher price than does a quota.
• C) a tariff generates a greater reduction in exports than does a quota.
• D) a quota increases the profits of domestic producers more than a tariff.

Identify and interpret Marginal Cost (MC), Marginal Revenue (MR), Average Total Cost (ATC), and Average Variable Cost (AVC) from graphical representations.

Determine the profit-maximizing output level for a firm in the short run.

Analyze the conditions under which a firm should continue production or shut down in the short run.

Understand and apply the marginal decision rule in the context of economic profit maximization.

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Definitions:

Fatty Acids

Organic compounds that are important sources of energy, consisting of a hydrocarbon chain and a terminal carboxyl group.

Glycerol

A simple sugar alcohol compound that is a building block for fats and oils and serves as a backbone in triglyceride formation.

Trypsin

An enzyme produced by the pancreas that plays a key role in the digestion of proteins in the small intestine.

Small Intestine

A part of the gastrointestinal tract between the stomach and the large intestine where most of the digestion and absorption of nutrients occurs.