If a country imposes a tariff on imported shoes,we expect the domestic price of shoes to _____,domestic consumption to _____,and domestic production to _____.

Question

Quizplus · Accepted Answer

When a country imposes a tariff on imported shoes, it increases the price of imported shoes. This makes domestic shoes more competitive and therefore, the domestic price of shoes rise. As the price of shoes increases, domestic consumers will buy fewer shoes, leading to a fall in domestic consumption. Also, as the domestic price of shoes increases, domestic producers will be incentivized to produce more shoes, leading to a rise in domestic production. Therefore, the correct answer is C.

If a Country Imposes a Tariff on Imported Shoes,we Expect