Which Policy for Restricting Trade Would Be Most Attractive to a Country

question 181

Multiple Choice

Which policy for restricting trade would be most attractive to a country that is imposing a trade restriction in an effort to raise as much government revenue as possible to cover government expenses?

• A) a quota that reduces imports by 50,000 units for a product with $150 price tag
• B) a quota that reduces imports by 100,000 units for a product with a $100 price tag
• C) an $8 specific tariff on a product with a $100 price tag that reduces imports from 350,000 to 220,000 units
• D) a 10% ad valorem tariff on a product with a $100 price tag that reduces imports from 300,000 to 200,000 units

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Definitions:

Equilibrium Price

The price point in the market at which the amount of goods being offered for sale matches the amount of goods buyers are willing to purchase.

Football Game

A competitive team sport involving two squads attempting to advance an oval-shaped ball into the opponent's goal area to score points.

Soccer Match

A soccer match is a competitive game between two teams, each aiming to score more goals than the other within a specified period.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor of production, such as labor or capital.