9. We know that in economics, we have various instances of equivalence. For example, it is argued that for any specific tariff one can find an equivalent ad valorem tariff; and that for any quota one can calculate a tariff equivalent. Can you think of a situation when

a. a specific and an ad valorem tariff are not equivalent

b. a tariff and a quota are not equivalent.

(Feel free to use internet resources here and make any argument you find relevant. The point is for you to see the effect of differences in policy institution under different circumstances)

Answer rating: 100% (QA)

Situations where Equivalence Breaks Down a Specific vs Ad Valorem Tariffs Equivalence between specific and ad valorem tariffs breaks down when product ... View the full answer