A difference between a quota and a tariff is that
A)a tariff generates a higher price than does an import quota.
B)a tariff generates a greater reduction in exports than does an import quota.
C)an import quota increases profits of domestic producers more than a tariff.
D)the government collects revenue from a tariff but does not collect revenue from an import quota.
E)an import quota generates a deadweight loss and a tariff does not.

Question

Quizplus · Accepted Answer

A tariff is a tax placed on imported goods, which is collected by the government, while an import quota is a limit on the quantity of a certain good that can be imported. Therefore, choice D is correct because the government collects revenue from a tariff but does not collect revenue from an import quota.

A Difference Between a Quota and a Tariff Is That