Tariffs and quotas tend to be similar in their domestic welfare effects
A) if quota licenses are given to foreigners.
B) if quota license are auctioned.
C) if quota licenses are given to domestic firms.
D) Both B and C.

Question

Quizplus · Accepted Answer

Both B and C result in similar domestic welfare effects because they allow the domestic government or firms to capture the economic rents that would otherwise go to foreign producers, similar to the revenue generated by tariffs.

Tariffs and Quotas Tend to Be Similar in Their Domestic