In the case of a small country,consumer surplus
A)decreases less with a tariff than with an equivalent quota.
B)decreases less with a quota than with an equivalent tariff.
C)is not changed by tariffs or quotas.
D)decreases the same with tariffs and equivalent quotas.
E)increases more with quotas.

Question

Quizplus · Accepted Answer

In a small country, tariffs and equivalent quotas have the same effect on consumer surplus because both restrict imports to the same level, leading to the same increase in domestic prices and decrease in consumer surplus.

In the Case of a Small Country,consumer Surplus