Tariffs and Quotas Are Costly to Consumers Because

question 136

Multiple Choice

Tariffs and quotas are costly to consumers because

• A) the price of the imported good falls.
• B) the supply of the imported good increases.
• C) import competition increases for domestic goods.
• D) consumers have to switch to higher-priced domestic goods.

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Definitions:

Supply

The total amount of a specific good or service that is available to consumers in a given market at a given time.

Tax

A financial charge or other levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures.

Elastic

Describes a situation in economics where the demand or supply of a good or service significantly changes in response to a change in price.

Seller

An individual or entity that offers goods or services for sale.