One Big Difference Between Tariffs and Quotas Is That Tariffs

question 110

Multiple Choice

One big difference between tariffs and quotas is that tariffs:

• A) raise the price of a good while quotas lower it.
• B) generate tax revenues while quotas do not.
• C) stimulate international trade while quotas inhibit it.
• D) hurt domestic producers while quotas help them.
• E) give the same outcome as free trade while quotas do not.

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Definitions:

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Short-Run Supply

The supply of goods or services that can be adjusted in a relatively short period to meet changes in demand.

Long-Run Supply

The total quantity of goods or services that producers are willing and able to supply over a long period, considering all inputs and production costs are variable.

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output).