7. For most of our nation's history it used tariffs rather than taxes on income in order to provide money for the national (federal) government in Washington, D.C. What is the effect on the supply curve for a good imported from China if the U.S. government imposed a $1 tariff on it? Would that cause more or less of that good to be purchased? Why? Now suppose the government uses quotas rather than tariffs. By limiting the amount of a foreign good that can be sold in this country, Americans who make the same good have an easier time selling their good with less competition. What effect does a quota have on the supply curve and the equilibrium price for an imported good? Who makes more money because of a quota, and who loses the most from it? | 7. For most of our nation's history it used tariffs rather than taxes on income in order to provide money for the national (federal) government in Washington, D.C. What is the effect on the supply curve for a good imported from China if the U.S. government imposed a $1 tariff on it? Would that cause more or less of that good to be purchased? Why? Now suppose the government uses quotas rather than tariffs. By limiting the amount of a foreign good that can be sold in this country, Americans who make the same good have an easier time selling their good with less competition. What effect does a quota have on the supply curve and the equilibrium price for an imported good? Who makes more money because of a quota, and who loses the most from it? |