What is best for nation as whole tariff-quota or free trade

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1. Describe both quotas and tariffs. How do they impact domestic prices and deadweight loss? How does an import quota differ from an equivalent tariff? What is best for a nation as a whole: a tariff, a quota, or free trade?

2. Give an example of a positive and a negative externality. Would a Coasean solution resolve the economic efficiency of the externalities you cites? Why or why not?

3. The Coase theorem suggests that efficient solutions to externalities can be arrived at through bargaining. Under what circumstances does this fail to produce a solution?

Reference no: EM13225097

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