How Does a Tariff Imposed by a Large Country Differ

question 93

Multiple Choice

How does a tariff imposed by a large country differ from a tariff imposed by a small country?

• A) If a large nation imposes a tariff, that government gets more revenue.
• B) It may not have any effect at all in the large country, since its consumers have so many other choices.
• C) Because of its size, the large nation's tariff not only decreases the quantity demanded of the product but may also reduce the world price of the good.
• D) The large nation can just buy up foreign producers if the foreign producers don't like having a tariff imposed.

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