Which of the following would be expected if the tariff on foreign-produced automobiles was increased?
A)The domestic price of automobiles would fall.
B)The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise.
C)The number of unemployed workers in the domestic automobile industry would rise.
D)The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations.

Question

Which of the following would be expected if the tariff on foreign-produced automobiles was increased?
A)​The domestic price of automobiles would fall.
B)​The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise.
C)​The number of unemployed workers in the domestic automobile industry would rise.
D)​The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations.

Quizplus · Accepted Answer

If the tariff on foreign-produced automobiles is increased, the supply of foreign automobiles to the domestic market would be reduced, resulting in a decrease in the quantity of foreign-produced automobiles demanded by domestic consumers. As a result, the price of automobiles would increase, which can lead to a decline in the purchasing power of consumers. Moreover, consumers may shift towards domestically produced automobiles, which can lead to a rise in the demand for domestically produced automobiles. Nevertheless, this may not necessarily lead to a decrease in the price of automobiles. The number of unemployed workers in the domestic automobile industry may decrease as domestic production increases, and the demand for foreign-produced automobiles would likely decrease, as the cost of the automobiles would be higher due to the increased tariff.

Which of the Following Would Be Expected If the Tariff