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US Government Laws Limit the Importation of Sugar into the United

Question 101

Multiple Choice

U.S. government laws limit the importation of sugar into the United States. As a result, the U.S. price of sugar is about three times as high as the world price of sugar. U.S. sugar producers strongly support these rules. How would most economists explain this policy?


A) It is an example of a form of sin tax intended to help people with a self-control problem involving sweets.
B) It illustrates the public choice view that small gains concentrated to a few producers can be more important politically than large losses spread over many consumers.
C) The policy is a way of solving an income distribution problem; it redistributes from the rich to the poor.
D) It is an example of the government using cost/benefit analysis to correct a market failure.

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