Th4.1: ^^^ Quotas Flashcards
1
Q
What are quotas?
A
limits placed on the level of imports allowed into a country, meaning people are forced to buy domestic goods if they want that good and the quota is already used up
2
Q
Like tariffs, a diagram can be used to represent…
A
how the imposition of a quota leads to welfare loss
3
Q
Refer to PP
Look at Graph 17. The government could introduce a quota of… and this would…
A
a quota of KL and this will have the same affect as introducing a tariff which raises price to P2
4
Q
Refer to PP
Look at Graph 17. What will there be in terms of welfare and subsidies?
A
a welfare loss and shift of consumer subsidy to producer subsidy
5
Q
Refer to PP
Look at Graph 17. Instead of tax revenue, there will be…
A
there will be extra revenue for the exporting, foreign firms
