Explanation Tariffs are taxes that are in the levied on the imports. As a result, it increases the price of the foreign goods making it more expensive for the customers. The primary reasons for imposing tariff by the government are to increase their revenue and to protect domestic companies from foreign competition. The consumer’s surplus reduces but the producer’s surplus decreases. Quota, on the other hand, is the upper limit of the quantity of goods imported from or exported to other countries. This affects the price of the goods traded between countries. The primary reason for imposing quota is to regulate trade volume between nations which encourages the production of good within the country and reduces the dependency on other countries. There is fall in consumer surplus ...

5th Edition

ISBN: 9781337000529

Author: William A. McEachern

Publisher: Cengage Learning

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Protective Tariffs

A tariff is a kind of tax that is charged on exported and imported items. It means tariff is charged on both kinds of goods i.e., exported and imported. However, some goods may be exempted from this kind of tariff. Protective Tariffs refer to the charges…

Question

Chapter 3, Problem 4.14P

To determine

The difference between a tariff and a quota, and the type of section of economy that benefits from and is harmed by such restrictions on imports.

Expert Solution & Answer

Chapter 3 Solutions

ECON MACRO

Ch. 3 - Prob. 1.1P Ch. 3 - Prob. 1.2P Ch. 3 - Prob. 1.3P Ch. 3 - Prob. 1.4P Ch. 3 - Prob. 2.5P Ch. 3 - Prob. 2.6P Ch. 3 - Prob. 2.7P Ch. 3 - Prob. 2.8P Ch. 3 - Prob. 3.10P Ch. 3 - Prob. 3.11P

Ch. 3 - Prob. 3.12P Ch. 3 - Prob. 3.9P Ch. 3 - Prob. 4.13P Ch. 3 - Prob. 4.14P

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