Scenario: Montesia is predominantly a producer and exporter of manufactured goods. However, it imports several agricultural products.
-Refer to the scenario above.Recently,the government of Montesia has imposed a tariff on the import of some cash crops.Which of the following is likely to happen in this case?

Question

Quizplus · Accepted Answer

By imposing a tariff on the import of cash crops, the government of Montesia is making it more expensive for domestic consumers to purchase these crops from abroad. As a result, domestic producers of cash crops will be better off, as they will face less competition from cheaper imports and may be able to charge higher prices for their goods. The government may also benefit from increased tax revenues from domestic producers. There is no reason to expect that the volume of imports will increase, as the tariff is likely to make imports less attractive to consumers.

Scenario: Montesia Is Predominantly a Producer and Exporter of Manufactured