In economic terms,tariffs are preferred to quotas because
A)domestic manufacturers gain more producer surplus.
B)there is less loss of consumer surplus.
C)tariffs are easier to administer.
D)quotas create a greater production inefficiency.
E)given the way quotas are usually administered,tariffs cause a smaller net national welfare loss.

Question

Quizplus · Accepted Answer

Tariffs cause a smaller net national welfare loss compared to quotas because the administration of quotas is usually more complex and prone to corruption. Also, with tariffs, the government can collect revenue from the importers, which can be used to fund public goods and services. Additionally, quotas create a greater production inefficiency by limiting the competition and potentially leading to higher prices for consumers. Thus, in economic terms, tariffs are preferred to quotas.

In Economic Terms,tariffs Are Preferred to Quotas Because