If a small country imposes a tariff:
A) the imported product price rises by more than the tariff.
B) the imported product price rises by exactly the amount of the tariff.
C) the imported product price rise by less than the amount of the tariff.
D) the imported product price falls by the amount of the tariff.
E) the effects are the same for a large country.

Question

Quizplus · Accepted Answer

The price of the imported product typically rises by exactly the amount of the tariff, as the cost of the tariff is passed directly onto consumers in the form of higher prices.

If a Small Country Imposes a Tariff