The welfare effects of quotas depend, _____, on who has the right to import the quota restricted goods.

Question

a. always

b. most of the time

c. to some extent

d. never

Answer 1

c. to some extent

Welfare is usually defined as the country's welfare, so it really doesn't matter who is making the profit as long as it's not a foreign owned entity.

Answer 2

b. most of the time

Transfer of welfare from one group to another through quotas depends on if certain good is demanded on domestic market at all, so "Always" and "Never" may be excluded. But since quotas in most cases are "effective", we can conclude that "b" is right answer.

"c" is false because we don't know who owns quotas, foreigners or domestic companies.