The country of Plena imposes an ad valorem tariff of 10 percent on 1 million tons of rice imports, after which an out-of-quota tariff of 80 percent is applied. What trade policy instrument is Plena using?

Question

Quizplus · Accepted Answer

Plena is using a tariff rate quota, which involves imposing a lower tariff rate on imports up to a certain quantity (1 million tons in this case) and a higher tariff rate on imports that exceed that quantity (80 percent out-of-quota tariff).

The Country of Plena Imposes an Ad Valorem Tariff of 10