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How do tariffs and quotas differ? Can you think of any reason why foreign producers might prefer a quota rather than a tariff? Explain your answer.

It is often alleged that Japanese producers receive subsidies from their government permitting them to sell their products at a low price in the U.S. market. Do you think we should erect trade barriers to keep out cheap Japanese goods if the source of their low price is a government subsidy? Why or why not?

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