Tariffs and import quotas have the following differing outcomes:
A)import quotas do not create deadweight losses but tariffs do
B)tariffs help domestic consumers and import quotas help domestic producers
C)tariffs raise revenue for the government but import quotas create a surplus for import licence holders
D)tariffs increase prices but import quotas do not.

Question

Quizplus · Accepted Answer

Tariffs are a source of revenue for the government as they are taxes on imported goods. Import quotas, on the other hand, limit the quantity of goods that can be imported and do not directly generate revenue for the government. Instead, they can create a surplus for those who hold the import licenses, as they can sell their limited right to import at a premium.

Tariffs and Import Quotas Have the Following Differing Outcomes