The U.S. sugar quota
A) generates government revenue.
B) results in net welfare benefits to the U.S. economy.
C) results in benefits to sugar producers that exceed the cost to consumers.
D) results in costs to consumers that exceed the benefits to sugar producers.
E) does not result in an efficiency loss.

Question

Quizplus · Accepted Answer

The U.S. sugar quota results in costs to consumers that exceed the benefits to sugar producers, as the price of sugar for consumers is higher due to the quota, while sugar producers benefit from the protectionism. This leads to an efficiency loss in the economy.

The U.S. Sugar Quota