Asked by Kendra Grady on Jun 01, 2024
Verified
A tariff imposed on imported wine will cause the domestic ________ of wine to increase and the domestic ________ of wine to increase.
A) price; production
B) cost; price
C) imports; exports
D) revenues; imports
Domestic Consumption
The total amount of goods and services consumed by the residents of a country.
Domestic Production
The total value of all goods and services produced within a country's borders over a specified period of time.
- Understand the impact of tariffs and quotas on domestic prices and production.
Verified Answer
CH
Corey HillmanJun 01, 2024
Final Answer :
A
Explanation :
A tariff on imported wine makes imported wine more expensive, leading to an increase in the domestic price of wine as the market adjusts. This higher price makes domestic production more competitive and profitable, encouraging an increase in domestic production of wine.
Learning Objectives
- Understand the impact of tariffs and quotas on domestic prices and production.