What Is the Difference Between the Effect of an Import

question 52

Multiple Choice

What is the difference between the effect of an import quota when quota rights are given away and the effect of a tariff?  

• A) The tariff results in a higher domestic price, but the quota does NOT. 
• B) The quota decreases the amount of goods imported, but the tariff does NOT. 
• C) Under a quota, part of the decrease in consumer surplus is redistributed to foreign producers, but under a tariff it is redistributed to the domestic government. 
• D) Under a tariff, part of the decrease in consumer surplus is redistributed to foreign producers, but under a quota it is redistributed to the domestic government.