The WTO Has Encouraged Nations to Replace Their Import Quotas

question 67

Multiple Choice

The WTO has encouraged nations to replace their import quotas with
Tariffs.Why?

• A)Quotas are more difficult to administer for the customs people.
• B)Quotas are more discriminatory.
• C)Quotas hurt domestic firms more than tariffs.
• D)Quotas result in larger losses than tariffs with equivalent protection on domestic monopolists.

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Definitions:

Margin of Safety

The difference between actual or projected sales and the break-even sales, indicating the amount by which sales can decline before a business incurs losses.

Percentage of Sales

A financial ratio that expresses certain financial metrics, such as expenses or profits, as a percentage of total sales, providing insight into efficiency or profitability.

Margin of Safety

This metric indicates the difference between actual or projected sales and the break-even sales point, highlighting the buffer a business has before it incurs a loss.

Operating Leverage

A financial metric that indicates how a company's operating income reacts to a change in sales volume, showing the degree of fixed versus variable costs.