Rec 6 - Quota & tariffs are inefficient...

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March 18, 2009 Import: when world price is lower than market equilibrium price Export: when world price is higher than the equilibrium price The reason for tariffs & quotas is to promote domestic trade (make people buy US products). Quota – maximum allowed number of imports
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Unformatted text preview: Quota & tariffs are inefficient & create DWL Utility numeric representation of happiness Budget line how much you can purchase given your budget (like a PPF), how much can you consume with the money you have...
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