A difference between a quota and a tariff is that with a quota the
A) person who has the right to import the good captures an extra gain.
B) exporting government collects an extra gain in the form of revenue.
C) importing government collects an extra gain in the form of revenue.
D) domestic consumers are not harmed.

Question

Quizplus · Accepted Answer

A quota limits the quantity of goods that can be imported, creating scarcity that can lead to higher prices for those goods. This can enable the person or entity with the import rights (often through licenses) to capture extra gains due to the ability to sell the limited goods at higher prices. Tariffs, on the other hand, are taxes on imported goods collected by the importing government, thus directly generating revenue for the government, not for individuals or entities with import rights.

A Difference Between a Quota and a Tariff Is That