Two economists are debating whether or not to remove a tariff on luxury vehicles

Question

Two economists are debating whether or not to remove a tariff on luxury vehicles. They agree that consumers will benefit by $5 billion and that the harm done to domestic businesses and workers will only be $4 billion. One argues that these facts make it obvious that the tariff should be removed. The other disagrees. What would be a likely reason for the second economist to disagree?


A. There is no good reason because the benefits outweigh the costs.
B. He is using a different economic model to understand the world.
C. He has a different interpretation of the empirical evidence.
D. He has different value judgments about the weights that should be put on the benefits and costs.

Explanation / Answer

D. He has different value judgments about the weights that should be put on the benefits and costs.

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