Question

American apparel makers complain to Congress about competition from China. Congress decides to impose either a tariff or a quota on apparel imports from China. Which policy would Chinese apparel manufacturers prefer?A.tariffB.Quota

Answer 1

Answer:

Quota is preferred by the Chinese apparel manufacturers.

Explanation:

The reason is that the China has an competitive advantage of less costly workers and also that they are highly competitive in terms of prices. Usually the quality of American’s products are far much better in quality and technology. This means if the tariffs are imposed on Chinese products then their are huge revenue losses to Chinese apparel manufacturers. Whereas quota will enable them to sale their products to America which shows lower revenue losses.

So quota is far much better for Chinese manufacturer’s in case if America decides to use protectionist approach, I mean America decides to imposed trade barriers for Chinese companies to protect American companies.

Answer 2

Answer:

B. Quota

Explanation:

The Chinese apparel manufacturers would prefer quota (which is the temporary restriction that limits the number or monetary value of goods that a country can import or export during a particular period) to tariff, because if tariff is imposed, the amount the seller or producers uses to get the product to the consumers becomes higher as increase in the tariffs is simply the increase in tax imposed on goods.