Suppose the Government of an Importing Country Is Considering Imposing

question 72

Multiple Choice

Suppose the government of an importing country is considering imposing either a tariff that would result in imports falling to 1 million units per year or an import quota of 1 million units per year.Which of the following would be true in such a case?

• A)The U.S.consumers would lose more consumer surplus in the case of tariffs than quotas.
• B)The U.S.producers would gain more in the case of quotas than tariffs.
• C)The change in quantity demanded would be greater in the case of tariffs than quotas.
• D)The tariff revenue would go to U.S.government;quota benefits may go to foreign producers.
• E)The U.S.export market would shrink more in the case of quotas than tariffs.

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