The diagram below shows the demand and supply curves for refrigerators in Canada.
FIGURE 34- 1
-Refer to Figure 34- 1. If we compare the effect of an import tariff with the effect of an import quota, both of which cause the Canadian price to increase by the same amount, the major difference between the two policies is:
A) the quota does not directly reduce the quantity whereas the tariff does.
B) the tariff does not directly affect the price consumers pay whereas the quota does.
C) the tariff directly affects the price consumers pay whereas the quota has neither direct nor indirect price effects.
D) the tariff raises revenue for the protected producers whereas the quota benefits the government.
E) the tariff raises revenue for the government whereas the quota benefits foreign producers.
Correct Answer:
Verified
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