to raise price by more and reduce consumption less than a tariff of P c P t . th
ID: 1218445 • Letter: T
Question
to raise price by more and reduce consumption less than a tariff of PcPt.
the same as that of a tariff of PcPt.
the same as that of a tariff of PtPa.
the same as that of a tariff of PcPa.
2.
Which of the following best describes economists' general assessment of the impacts of offshoring?
Offshoring benefits the U.S. economy by promoting greater specialization and exchange of goods and services based on comparative advantage.
Offshoring has an overall negative impact on the U.S. economy because of the significant domestic job losses it causes.
Offshoring provides some cost advantages but generally results in much-lower-quality goods for consumers.
Job losses from offshoring are magnified by job losses in complementary industries.
Explanation / Answer
1.
Correct option: the same as that of a tariff of PtPa.
Reason: The change in price and quantity is the same in case of both tariff PtPa and import quota
2.
Correct option: Offshoring benefits the U.S. economy by promoting greater specialization and exchange of goods and services based on comparative advantage.
Reason: By moving work to low-cost countries, US economy can have greater cost advantages and profits because of the concept of comparative advantage
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