President Reagan negotiated a "voluntary" import quota on Japanese cars sold in the United States during the 1980s. Some of his advisors had recommended that he impose a higher import tax (tariff) instead. Assuming the tariff was in the form of a constant tax T per Japanese car sold in the United States and that T was chosen to produce the same quantity reduction as the quota, how will the prices paid for Japanese cars by U.S. consumers compare under the two policies?
I hate Reagan. I hate his Building, I hate his library, I hate his airport, and now I hate this textbook. Hate hate hate.