A key difference between tariffs and quotas is that
A) consumers are hurt with tariffs but not with quotas.
B) the government receives revenue with tariffs, but the importer receives the added revenue with quotas.
C) the government receives revenue with quotas, but the importer receives the added revenue with tariffs.
D) consumers are hurt with quotas but not with tariffs.

Question

Quizplus · Accepted Answer

Tariffs are taxes imposed on imported goods, so the government receives revenue from them. Quotas, on the other hand, limit the quantity of a particular good that can be imported, and the importer receives the added revenue from selling the limited supply at a higher price. Choice A and D are not accurate as both tariffs and quotas can potentially result in higher prices for consumers. Choice C is not accurate as the government does not typically receive revenue from quotas.

A Key Difference Between Tariffs and Quotas Is That