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- Non-Tariff Trade Barrierseconomics-mcqs › non-tariff-trade-barriers
- Published
- 30 May 2019
- Last updated
- 28 May 2026
When a tariff and an import quota cause the same increase in the domestic steel price, what differs between the two policies?
Multiple choice question for Non-Tariff Trade Barriers. Select an option, then review the explanation below.
Explanation
Although both a tariff and an import quota can raise domestic prices by the same amount, their effects on income distribution differ. The quota often creates quota rents that benefit import license holders, whereas the tariff generates government revenue. However, both policies similarly reduce efficiency and have comparable impacts on production and consumption quantities.
More Non-Tariff Trade Barriers MCQs
Practice related questions from the same subject.
- 1.Which U.S. company would be most affected by Brazil selling steel at below-market prices in the American market?
- 2.Which type of quota limits the quantity of goods that can be imported annually without restricting the source country or the authorized importers?
- 3.Based on the cost-based definition, dumping happens when a company exports a product at a price lower than which of the following?
- 4.Which type of dumping is associated with the highest possible net welfare loss for the importing country?
- 5.Which policy restricts outsourcing by mandating that a certain portion of a product's value be manufactured within the country to qualify for sale in the domestic market?