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The Difference Between the Effects of an Import Quota and a Tariff

Question 26

Multiple Choice

The difference between the effects of an import quota and a tariff is that:


A) only the tariff results in a higher domestic price.
B) only the quota decreases the amount of goods imported.
C) the decrease in producer surplus is smaller with the quota.
D) under a quota,part of the decrease in consumer surplus is redistributed to foreign producers;under a tariff,it is redistributed to the domestic government.
E) under a tariff,part of the decrease in consumer surplus is redistributed to foreign producers;under a quota,it is redistributed to the domestic government.

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