Suppose that Paolo, an economist from a university in Arizona, and Sharon, an economist from a university in Massachusetts, are arguing over government bailouts. The following dialogue shows an excerpt from their debate:

Sharon: Thanks to recent financial crises, the concept of bailouts is a hot topic for debate among everyone these days.
Paolo: Indeed, it's gotten crazy! A government bailout of severely distressed financial firms is unnecessary because free markets will properly price assets.
Sharon: I don't know about that. Without a bailout of severely distressed financial firms, the economy will experience a deep recession.

The disagreement between these economists is most likely due to _____________________. Despite their differences, with which proposition are two economists chosen at random most likely to agree?

a. Lawyers make up an excessive percentage of elected officials
b. Minimum wage laws do more to harm low-skilled workers than help them.
c. Tariffs and import quotas generally reduce economic welfare.

1. Economists tend to have very varying opinions and this is a well known fact. So much so that even former President Ronald Reagan made jokes about their difference in opinions.

The two Economists in the scenario above, Paolo and Sharon both seem to disagree with each other because they believe that bailouts affect the Economy in different ways. This is most likely due to the scientific judgement that they reached after researching or thinking about the problem from different angles.

2. Despite the differences that Economists have with each other, it is a general belief that Tariffs and Quotas and indeed any hindrance to free trade between countries reduces economic welfare. In the case of Tariffs and Quotas, that reduction in welfare is called a Deadweight loss. You would be hard pressed to find an Economist that supports Quotas and Tariffs.