When the value of a quota gets transferred to the original farmer, we call this:
A)the economic rent trap.
B)the transitional gains trap.
C)the agricultural leg hold trap.
D)the profit trap.

Question

Quizplus · Accepted Answer

This is because the term "transitional gains trap" refers to the situation where the government introduces a quota or restriction on a certain market (such as agricultural products) which leads to increased profits for those already operating in that market. When the government decides to remove or transfer the quota, those who already have a vested interest in the market (such as original farmers) may benefit from the value of the quota being transferred to them, while others who may have wanted to enter the market may be discouraged or unable to do so. This is known as the transitional gains trap.

When the Value of a Quota Gets Transferred to the Original