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b. Why is an agreement to export only 100,000 cars to North America better for the Japanese producers than a North American tariff that results in the same volume of Japanese exports? O A. A quantity restriction raises the North American price more than a tariff. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. O B. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters sell more vehicles than they would with a tariff, so they have more revenue with a quantity restriction. OC. A quantity restriction raises the North American price more than a tariff so Japanese exporters receive a higher price under the quantity restriction. 'D. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. c. Who is paying for these benefits to the Japanese producers? O A. North American consumers because they pay a higher price and there is no revenue for their government O B. World consumers because the world price is higher Oc. Japanese consumers because they have fewer cars to purchase D. North American producers because they receive a higher price and there is no revenue for their government

b. Why is an agreement to export only 100,000 cars to North America better for the Japanese producers than a North American tariff that results in the same volume of Japanese exports? O A. A quantity restriction raises the North American price more than a tariff. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. O B. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters sell more vehicles than they would with a tariff, so they have more revenue with a quantity restriction. OC. A quantity restriction raises the North American price more than a tariff so Japanese exporters receive a higher price under the quantity restriction. 'D. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. c. Who is paying for these benefits to the Japanese producers? O A. North American consumers because they pay a higher price and there is no revenue for their government O B. World consumers because the world price is higher Oc. Japanese consumers because they have fewer cars to purchase D. North American producers because they receive a higher price and there is no revenue for their government

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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b. Why is an agreement to export only 100,000 cars to North America better for the Japanese producers than a North American tariff that results in the same volume of Japanese exports? S O A. A quantity restriction raises the North American price more than a tariff. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. O B. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters sell more vehicles than they would with a tariff, so they have more revenue with a quantity restriction. Pa O C. Aquantity restriction raises the North American price more than a tariff so Japanese exporters receive a higher price under the quantity restriction. Pw D. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. Permitted level of Imports Qo Q2 Quantity Q3 Q, c. Who is paying for these benefits to the Japanese producers? O A. North American consumers because they pay a higher price and there is no revenue for their government An import quota drives up the domestic price and imposes a deadweight loss on the importing country. With free trade, the domestic price is the world price, pw. Imports are Q,Q,. If imports are restricted to only Q,Q2, the domestic price must rise to the point where the restricted level O B. World consumers because the world price is higher of imports just satisfies the domestic excess demand-this occurs only at pa. The rise in price and reduction in consumption reduces consumer surplus by areas 1+2+3+4. Domestic producers increase their output as the domestic price rises, and producer surplus increases by area 1. Area 3 does not accrue to the domestic economy; instead this area represents extra producer surplus for the foreign firms that export their product to this country. The net effect of the quota is a deadweight loss for the importing country of areas 2+3+ 4. Import quotas are, therefore, worse than tariffs for the importing country. O C. Japanese consumers because they have fewer cars to purchase O D. North American producers because they receive a higher price and there is no revenue for their government O E. All other producers in the world because they receive a higher price
Transcribed Image Text:b. Why is an agreement to export only 100,000 cars to North America better for the Japanese producers than a North American tariff that results in the same volume of Japanese exports? S O A. A quantity restriction raises the North American price more than a tariff. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. O B. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters sell more vehicles than they would with a tariff, so they have more revenue with a quantity restriction. Pa O C. Aquantity restriction raises the North American price more than a tariff so Japanese exporters receive a higher price under the quantity restriction. Pw D. A quantity restriction and a tariff both raise North American price. With the quantity restriction, Japanese exporters receive the higher price, whereas with the tariff, part of the higher price goes to the government. Permitted level of Imports Qo Q2 Quantity Q3 Q, c. Who is paying for these benefits to the Japanese producers? O A. North American consumers because they pay a higher price and there is no revenue for their government An import quota drives up the domestic price and imposes a deadweight loss on the importing country. With free trade, the domestic price is the world price, pw. Imports are Q,Q,. If imports are restricted to only Q,Q2, the domestic price must rise to the point where the restricted level O B. World consumers because the world price is higher of imports just satisfies the domestic excess demand-this occurs only at pa. The rise in price and reduction in consumption reduces consumer surplus by areas 1+2+3+4. Domestic producers increase their output as the domestic price rises, and producer surplus increases by area 1. Area 3 does not accrue to the domestic economy; instead this area represents extra producer surplus for the foreign firms that export their product to this country. The net effect of the quota is a deadweight loss for the importing country of areas 2+3+ 4. Import quotas are, therefore, worse than tariffs for the importing country. O C. Japanese consumers because they have fewer cars to purchase O D. North American producers because they receive a higher price and there is no revenue for their government O E. All other producers in the world because they receive a higher price
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