A tariff results in a higher:
I. consumer surplus.
II. producer surplus.
III. government revenue.

Question

Quizplus · Accepted Answer

A tariff is a tax imposed on imported goods, which increases the price of the goods for domestic consumers. This reduces consumer surplus (I). However, it increases producer surplus by protecting domestic producers from foreign competition (II). The government collects revenue from the tariff (III). Therefore, choices II and III are correct.

A Tariff Results in a Higher