During the first 6 months of 2008, the United States imported 1,655,740,870 pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. If the United States has a goal of raising tax revenue from coffee imports, what policy should they pursue?

Question

Quizplus · Accepted Answer

A tariff on imported coffee would increase the price of imported coffee, leading to increased tax revenue for the United States. A voluntary export restraint would limit the amount of coffee imported, but would not necessarily increase tax revenue. A subsidy on imported coffee would decrease the price, leading to less tax revenue. A quota on imported coffee would limit the amount of coffee imported, but would not necessarily increase tax revenue. Therefore, a tariff on imported coffee is the best choice.

During the First 6 Months of 2008, the United States