Lowering the tariff on imported ethanol
A) increases the domestic price of ethanol.
B) increases the imports of ethanol.
C) increases domestic employment in the ethanol industry.
D) has no effect unless the nation's trading partner also lowers its tariff on ethanol.

Question

Quizplus · Accepted Answer

Lowering the tariff on imported ethanol makes it cheaper for importers to bring ethanol into the country, which typically leads to an increase in the quantity of ethanol imported. This is because the lower cost of importing ethanol makes it more competitive against domestically produced ethanol, assuming demand remains constant or increases.

Lowering the Tariff on Imported Ethanol