Imposing a Tariff on a Good Leads to a ________

question 207

Multiple Choice

Imposing a tariff on a good leads to a ________ in the price of the product and ________ in imports.

• A) rise; an increase
• B) rise; a decrease
• C) fall; an increase
• D) fall; a decrease
• E) rise; no change

---

Definitions:

Agricultural Subsidies

Government payments to farmers to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such goods.

Tariff

A tax imposed on imported goods, intended to increase the price of foreign products to protect domestic producers.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specific time frame.

Comparative Advantage

The capacity of a nation or company to manufacture a specific good or service with a lower opportunity cost compared to its rivals.