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.
Correct Answer:
Verified
Correct Answer:
Verified
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