Two economists are debating whether to remove a tariff on luxury vehicles. They agree that consumers will benefit by $5 billion and that the harm done to domestic businesses and workers will be only $4 billion. One argues that these facts make it obvious that the tariff should be removed. The other disagrees. What would be a likely reason for the second economist to disagree?
A) There is no good reason because the benefits outweigh the costs.
B) He or she is using a different economic model to understand the world.
C) He or she has a different interpretation of the empirical evidence.
D) He or she has different value judgments about the weights that should be put on the benefits and costs.

Question

Quizplus · Accepted Answer

The second economist might disagree due to different value judgments, prioritizing the harm to domestic businesses and workers over the net benefit.

Two Economists Are Debating Whether to Remove a Tariff on Luxury