Asked by Jeancarlos Chavarro on Apr 30, 2024
Verified
Which one of the following statements about tariffs and quotas is correct?
A) Only the tariff produces revenues for the government.
B) Only the quota will cause domestic production to increase.
C) Only the quota will cause domestic prices paid by consumers to increase.
D) Only the quota will cause the quantity of imports to decrease.
E) Only the tariff will result in higher prices for domestic production.
Tariffs
Tariffs are taxes imposed by a government on imported or exported goods.
Quotas
Government-imposed trade restrictions that limit the quantity or monetary value of goods that can be imported or exported during a specified time.
- Identify the economic rationale behind the imposition and impact of tariffs and quotas.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
A
Explanation :
Tariffs are taxes imposed on imported goods, which generate revenue for the government. Quotas, on the other hand, limit the quantity of goods that can be imported but do not directly generate revenue for the government.
Learning Objectives
- Identify the economic rationale behind the imposition and impact of tariffs and quotas.