If Canada reduces the tariff imposed on a commodity from 10 percent to 5 percent, we would expect to observe

Question

Quizplus · Accepted Answer

A reduction in the tariff imposed on a commodity decreases the cost of importing that commodity, making it cheaper for Canadian consumers. As a result, we would expect an increase in the quantity consumed of the commodity in Canada. Thus, D is the correct answer. A is incorrect because the reduction in tariff would lead to an increase in the quantity consumed, not a decrease. B and C are incorrect because the shift in demand curve occurs due to changes in factors influencing consumers' willingness to buy, which is not affected by tariff reduction. E is incorrect because the reduction in tariff is expected to increase the quantity imported of the commodity.

If Canada Reduces the Tariff Imposed on a Commodity from 10