Suppose the Government of an Importing Country Is Considering Imposing

question 3

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?

• A)The domestic price of the imported good will rise higher with the tariff than with the quota.
• B)Consumers in the importing country will be worse off with the quota than with the tariff.
• C)Domestic producers that compete with the imports will be better off with the tariff than with the quota.
• D)The tariff will increase the revenue of the government of the importing country,while the quota will increase the profits of the foreign exporting firms with quota rights.
• E)Tariffs raise the price of a good but quotas do not.

Understand the financial impact of price adjustments on sales and profitability.

Apply the concept of cost of goods sold (COGS) in the context of retail pricing and profitability.

Realize the roles of returns, allowances, and discounts in adjusting gross sales.

Analyze the impact of promotional activities on expense categories within an income statement.

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Definitions:

Self-Awareness

The consciousness of one's own character, feelings, motives, and desires, which is essential for personal development and emotional intelligence.

Anonymity

The condition in which an individual's identity is unknown or kept private.

Destructive Process

Any process that systematically breaks down or deteriorates the structure, function, or integrity of an object, system, or organism.

Hostility

Aggressive behavior or attitudes expressed towards others, often stemming from anger or antipathy.