4) Economic theory in general, and trade theory in particular are replete with equivalencies. For example, it is
argued that for any specific tariff one can find an equivalent ad valorum tariff; and that for any quota one can
calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorum tariff
are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.
Answer: E.g., during a period of price inflation, an ad valorum tariff would become increasingly more effective.
The government does not receive any of the quota revenues, unless the import licenses are sold or
auctioned.
Question Status: Previous Edition
8.4 The Effects of Trade Policy: A Summary
1) There are no questions for this section.
Answer: TRUE
Question Status: New
8.5 Appendix 1 to Chapter 8: Tariff Analysis in General Equilibrium
1) There are no questions for this section.
Answer: TRUE
Question Status: New
11
8.6 Appendix 2 to Chapter 8: Tariffs and Import Quotas in the Presence of Monopoly
1) There are no questions for this section.
Answer: TRUE
Question Status: New