If a Quota Is Set at the Same Quantity of Imports

question 98

Multiple Choice

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

• A)the quantity consumed in Country A is less under the quota than under the tariff.
• B)the quantity consumed in Country A is the same under the quota and under the tariff.
• C)the quantity consumed in Country A is more under the quota than under 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:

Total Direct Labor Cost Variance

The difference between the actual cost of direct labor used in production and the expected (or standard) cost.

Materials Price Variance

The difference between the actual cost of materials and the expected cost at standard prices, indicating how much was saved or overspent.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected to be used, valued at the standard cost.

Standard Material Requirement

The specified quantity of materials required to produce a set number of units of a product according to the standard production process.