The Difference Between the Effect of an Import Quota When

question 161

Multiple Choice

The difference between the effect of an import quota when quota rights are given away and the effect of a tariff is that

• A)only the tariff results in a higher domestic price
• B)only the quota decreases the amount of goods imported
• C)the decrease in producer surplus is smaller with the quota
• D)under a quota, part of the decrease in consumer surplus is redistributed to foreign producers; under a tariff, it is redistributed to the domestic government
• E)under a tariff, part of the decrease in consumer surplus is redistributed to foreign producers; under a quota, it is redistributed to the domestic government

Evaluate profit outcomes in market competition scenarios.

Apply game theory concepts to real-world situations and theoretical problems.

Understand the concept of Nash Equilibrium in game theory.

Identify best responses in simultaneous and sequential games.

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Definitions:

Net Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Operating Activities

Transactions and events that enter into the determination of net profit or loss.

Interest Received

Income earned from investing in interest-bearing financial instruments or accounts, such as savings accounts, bonds, or loans.

Net Cash Inflow

The difference between the cash receipts and cash disbursements in a given period, indicating the net amount of cash generated.