A Tariff Is Imposed on a Good

question 53

Multiple Choice

A tariff is imposed on a good. This ________ the quantity supplied, ________ the quantity demanded, and ________ the price in the home country.

• A)increases; decreases; raises
• B)increases; does not change; does not change
• C)increases; increases; raises
• D)increases; decreases; lowers
• E)decreases; increases; lowers

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Definitions:

Quantity Supplied

The level of a commodity or service that sellers are eager and qualified to sell at a set price over a designated period.

Market Equilibrium

The state in which market supply equals market demand, resulting in stable prices where producers and consumers agree.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.

Support Prices

Government-authorized price levels for agricultural products designed to stabilize farmers' incomes by buying surplus or offering price guarantees.