In 2006, the European Union EU) threatened to ban imports of long -grain rice because traces of genetically modified rice were found mixed in to commercial supplies. Instead of a complete ban, suppose the EU placed a tariff on the import of long -grain rice. Which of the following would be an outcome of this tariff?

Question

Quizplus · Accepted Answer

With a tariff, the price of long-grain rice in the EU would be lower than if rice imports were completely banned, since some rice would still be allowed to enter the market. However, the price would be higher than with free trade, as the tariff would increase the cost of imported rice. Therefore, the correct answer is C.

In 2006, the European Union EU) Threatened to Ban Imports