A tariff on imported peanuts ________ the quantity of peanuts imported and ________ the domestic price of peanuts.
A) decreases; decreases
B) decreases; increases
C) increases; lowers
D) does not change; increases

Question

Quizplus · Accepted Answer

A tariff on imported peanuts reduces the quantity of peanuts imported by making them more expensive, which in turn increases the domestic price of peanuts as domestic producers face less competition.

A Tariff on Imported Peanuts ________ the Quantity of Peanuts