Which of the Following Statements Is True

question 35

Multiple Choice

Which of the following statements is true?

• A)Economic efficiency would be increased if the United States eliminated all of its trade restrictions,but only if all other countries eliminated their trade restrictions too.
• B)The U.S.economy would gain from the elimination of its tariffs but not from the elimination of its quotas.
• C)Eliminating its tariffs and quotas unilaterally would not benefit the United States because this would remove the leverage it would have to persuade other countries to eliminate their trade restrictions.
• D)The U.S.economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to all members of society and one person's use does not diminish another's.

Private Goods

Products and services that are excludable and rivalrous, meaning only paying customers can consume them, and one person's consumption prevents another's.

Government Failures

occur when government action results in outcomes that fail to achieve desired welfare improvements or when the intervention leads to an inefficient allocation of resources.

Economic Efficiency

A situation in which all resources are allocated optimally to serve each individual or entity in the best way while minimizing waste and inefficiency.