Suppose the United States Auctioned Off All Import Quotas,the Auctions

question 71

Multiple Choice

Suppose the United States auctioned off all import quotas,the auctions were perfectly competitive,and the government received the revenues from the auction.In this case,the deadweight loss from a quota would be _____ the deadweight loss from an equivalent tariff.

• A)less than
• B)greater than
• C)equal to
• D)in the case of demand being elastic,greater than

---

Definitions:

Direct Costs

Direct costs are expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Merchandising Company

A business that purchases finished goods for resale, aiming to make a profit without changing the form of the goods.

Cost of Goods Sold

The direct costs related to the production of the goods that a company sells, including materials and labor.

Indirect Manufacturing Cost

Costs that are not directly traceable to specific units produced, such as utilities or rent for manufacturing facilities.