Ceteris paribus,a tariff is:
A)superior to an import quota for Canadians because a tariff increases the profits of foreign producers
B)inferior to an import quota for Canadians because a tariff increases the profits of domestic producers
C)superior to an import quota for Canadians because a tariff generates revenue for the Canadian government
D)inferior to an import quota for Canadians because a tariff generates revenue for the Canadian government
E)the same as an import quota for Canadians because both are forms of trade protection

Question

Quizplus · Accepted Answer

A tariff generates revenue for the Canadian government, while an import quota benefits domestic producers at the expense of foreign producers. Therefore, a tariff may be viewed as superior to an import quota for Canadians. Option A is incorrect because a tariff would increase the cost of imported goods, lowering foreign producers' profits. Option B is incorrect because an import quota would benefit domestic producers, not a tariff. Option D is incorrect as a tariff generates revenue for the government, not an import quota. Option E is incorrect as a tariff and an import quota are different forms of trade protection.

Ceteris Paribus,a Tariff Is