Transfers, Tariffs and Quotas


  1. Transfers
Why would cash transfers typically be preferred by recipients over in-kind transfers? What are the pros and cons of each from a government perspective? Respond to at least two of your classmates.
Cash transfers
Cash transfers are government benefits that citizens receive for the purposes of improving their lifestyle.   They include Social security and unemployment benefits.   Recipients prefer such benefits because they can spend the funds freely and experience maximum utility.
Pros and cons from a government perspective
The advantage is that the government may achieve devolution and equality by allocating funds to all people including the poor. However, cash transfers are unconditional, and the government has no power over the allotted funds leading to wastage of government funds.   In addition, there is little development in the economy and poverty increment due to poor healthcare, shelter, and lack of other necessities (Madrick 2009).
In-kind benefits
They are benefits offered to the public in the form of goods and services free of charge or at a lower price. Examples include Medicare and Stafford Students Loans. Recipients, therefore, get access to necessities.

Pros and cons
Governments control the funds and provide necessities to all citizens. Similarly, the benefits encourage self-selection and help kids and other people in society who do not have the power to make decisions. However, recipients are less happy as utility is limited.
  2. Tariffs and Quotas
Who gains and who loses from a tariff? How do the effects of tariffs differ from the effects of quotas? If you were a small country, what would you rather utilize?
A tariff is a tax charged by the government on imported goods. In most cases, importing countries gain from tariffs compared to exporters because imported goods fetch higher prices.   For this reason, consumers buy local goods that are cheaper....