Suppose the U

question 45

Multiple Choice

Suppose the U.S. government is considering imposing either a tariff that would result in imports falling to 5 million units per year or an import quota of 5 million units per year. Which of the following would be true in such a case?

• A) U.S. consumers would lose more consumer surplus in the case of tariffs than quotas.
• B) 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 the 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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Definitions:

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