Purchase Solution

Quotas and mandates reduce society's happiness

Not what you're looking for?

Ask Custom Question

Discuss the following from an economic perspective and give numerical examples:

Quotas and mandates reduce society's happiness by causing too few resources to flow to an industry where the government has intervened.

Purchase this Solution
Solution Summary

The solution discusses quotas and mandates from an economic perspective and give examples.

Solution Preview

In a free market, resources are allocated in a way maximizes social welfare. This is done through the pricing of goods, which rewards the producers of the products most in demand. When the government forces an industry to reduce production through a quota or mandate, resources are diverted to some less useful purpose. From the standpoint of economic efficiency, this is not desirable. However, the free market fails in some cases, and this is why governments intervene. Reasons for failure include: (1) goods that are characterized by nonrival consumption and/or problems excluding nonpayers from consumption, (2) limited competition and market control by either buyers or sellers, (3) external costs or benefits that are not reflected in demand price or supply price, or (4) limited or imperfect information about the product or market transaction by either buyer sellers. Market ...

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Resource transfers

    3) Does this mean every activity that loses money decreases society's happiness, and any activity that makes money increases society's happiness?

  • three primary actors in the economy

    159395 three primary actors in the economy The purpose of economics is to allocate scarce resources in a manner that maximizes society's happiness and to their highest valued use. Do you agree? 1) How do we measure society's happiness ?

  • Quotas and Affirmitive Action Analysis

    425663 Distinguish between quotas and affirmative action goals. Distinguish between quotas and affirmative action goals.

  • Happiness in different cultures

    563338 Happiness in Different Cultures What do you see as "the American dream," and how is it associated to happiness and freedom? What are some places in the world where the definition of happiness and/or freedom might be different?

  • Performance Management

    The measures are intended to improve police effectiveness and public relations, as well as to, reduce crime and other unacceptable behaviors.

  • tariffs, quotas

    442926 tariffs, quotas, etc Since the case for gains from trade for a country is strong, why do governments continue to attempt to reduce trade with tariffs, quotas, and the like?

  • International Trade Tariffs and Quotas

    Quotas may prevent the company to exploit full growth or market potential in several markets. These tariffs and quotas will protect domestic manufacturer's interests in those countries and will reduce whirlpool's competitiveness.

  • Market Imperfections - Monopolies

    159633 Market Imperfections - Monopolies Monopolies: Discuss the following statements in Detail a) are a good thing since they transfer resources from lower-valued to higher- valued activities thereby helping to maximize society's happiness?

  • Trade controls: Tariffs, Subsidies, and Quotas/Flex Exchange

    This is a negative for international trade, and affects the relationship of trading partners negatively. Quotas reduce the amount of international trade. Trade Barriers: Tariffs, Export Subsidies, and Quotas. (n/d).

View More Related Solutions