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)decreases the same with tariffs and equivalent quotas.
D)increases more with quotas.

Question

Quizplus · Accepted Answer

In a small country, both tariffs and equivalent quotas lead to the same reduction in consumer surplus because they both restrict imports to the same extent, raising domestic prices.

In the Case of a Small Country,consumer Surplus