Suppose a 10% Tariff on All Wines Imported into Canada

question 62

Multiple Choice

Suppose a 10% tariff on all wines imported into Canada was introduced.The effect of this tariff would be to

• A)equally protect the production of all Canadian wines.
• B)protect the expensive wines more than the cheaper wines.
• C)protect the cheaper wines at the expense of the expensive wines.
• D)provide no protection at all to the Canadian wine industry.
• E)create the incentive to produce better quality wines.

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Definitions:

Demand Curve

Illustrates the willingness of consumers to buy a particular quantity of a good at various price levels, with a downward slope indicating that as price decreases, demand increases.

Plaster

A building material composed of water, lime, and sand, used for coating walls and ceilings or for creating architectural decorations.

Labor

The physical and mental effort used in the production of goods and services by workers.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity of that good supplied by producers, achieving a state of market balance.