Suppose a tariff is imposed on avocados. This has the effect of _____ the domestic price of avocados, as well as having the effect of _____ the imported price of avocados.

Question

Quizplus · Accepted Answer

Imposing a tariff on avocados increases the domestic price because it makes imported avocados more expensive, encouraging consumers to buy more domestic avocados, which can drive up their price. It also increases the imported price directly through the cost of the tariff itself.

Suppose a Tariff Is Imposed on Avocados