If Canada imposes a tariff on imported cars,

Question

Quizplus · Accepted Answer

Imposing a tariff on imported cars will increase the cost of importing cars into Canada, and this cost will likely be passed on to consumers in the form of higher prices for cars. This would lead to a rise in the price of a car in Canada, but it would not shift Canada's demand curve for cars (which reflects the quantity of cars that Canadians are willing to buy at different prices) or Canada's supply curve of cars (which reflects the quantity of cars that Canadian car producers are willing to sell at different prices). Therefore, the correct answer is E.

If Canada Imposes a Tariff on Imported Cars